UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

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

For the fiscal year ended June 28, 2019

July 1, 2022

OR

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

For the transition period fromfrom:to

Commission File No. Number 001-31560

SEAGATE TECHNOLOGY HOLDINGS PUBLIC LIMITED COMPANY

(Exact name of registrant as specified in its charter)

Ireland98-0648577
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification Number)

38/39 Fitzwilliam Square

Dublin 2, Ireland

(Address of principal executive offices)

D02 NX53

(Zip Code)

Registrant’s telephone number, including area code:(353) (1) 234-3136

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

Ireland98-1597419
(State or other jurisdiction of
incorporation or organization)		(I.R.S. Employer
Identification Number)
38/39 Fitzwilliam Square
Dublin 2, Ireland
(Address of principal executive offices)
D02 NX53
(Zip Code)
Registrant’s telephone number, including area code: (353) (1) 234-3136

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

Trading Symbol(s)

Name of Each Exchange
on Which Registered

Ordinary Shares, par value $0.00001 per shareSTXSTXThe NASDAQ Global Select Market

Securities registered pursuant to Section 12(g) of the Act:
None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

    YES   Yes ☒    NO      No ☐

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

    YES   Yes ☐    NO      No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

    YES   Yes ☒    NO      No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 ofRegulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

    YES   Yes ☒    NO      No ☐

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

Large accelerated filer☒☒Accelerated filer:Accelerated filer☐
Non-accelerated filerfiler:☐☐Smaller reporting companycompany:☐
Emerging growth companycompany:☐
       If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.☐
       Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.☒

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

Indicate by check mark whether the registrant is a shell company (as defined inRule 12b-2 of the Act).

    YES   Yes ☐    NO      No ☒

The aggregate market value of the voting andnon-voting ordinary shares held bynon-affiliates of the registrant as of December 28, 2018,31, 2021, the last business day of the registrant’s most recently completed second fiscal quarter, was approximately $10.9$24.7 billion based upon the closing price reported for such date by the NASDAQ.

The number of outstanding ordinary shares of the registrant as of July 29, 2019August 1, 2022 was 269,037,767.

208,755,418.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the definitive proxy statement to be filed with the Securities and Exchange Commission pursuant to Regulation 14A relating to the registrant’s Annual General Meeting of Shareholders, to be held on October 29, 2019,24, 2022, will be incorporated by reference in this Form10-K in response to Items 10, 11, 12, 13 and 14 of Part III. The definitive proxy statement will be filed with the SEC no later than 120 days after the registrant’sregistrant's fiscal year ended June 28, 2019.

July 1, 2022.


SEAGATE TECHNOLOGY HOLDINGS PLC

TABLE OF CONTENTS

Item

   Page No. 
 PART I 

1.

 

Business

  3 

1A.

 

Risk Factors

  14 

1B.

 

Unresolved Staff Comments

  29 

2.

 

Properties

  30 

3.

 

Legal Proceedings

  30 

4.

 

Mine Safety Disclosures

  30 
 PART II 

5.

 

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

  31 

6.

 

Selected Financial Data

  32 

7.

 

Management’s Discussion and Analysis of Financial Condition and Results of Operations

  35 

7A.

 

Quantitative and Qualitative Disclosures About Market Risk

  47 

8.

 

Financial Statements and Supplementary Data

  49 

9.

 

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

  95 

9A.

 

Controls and Procedures

  95 

9B.

 

Other Information

  95 
 PART III 

10.

 

Directors, Executive Officers and Corporate Governance

  96 

11.

 

Executive Compensation

  96 

12.

 

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

  96 

13.

 

Certain Relationships and Related Transactions, and Director Independence

  96 

14.

 

Principal Accountant Fees and Services

  96 
 PART IV 

15.

 

Exhibits and Financial Statement Schedules

  97 
 

EXHIBIT INDEX

  98 
 

SIGNATURES

  107 

Item Page No.
PART I
 
1
4
1A.
16
1B.
35
2
36
3
36
4
36
PART II
 
5
37
6
38
7
38
7A.
47
8
49
9
90
9A.
90
9B.
90
9C.
90
PART III
 
10
91
11
91
12
91
13
91
14
91
PART IV
 
15
92
93
102




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PRESENTATION OF FINANCIAL AND OTHER INFORMATION

In this Annual Report onForm 10-K (the“Form “Form 10-K”), unless the context indicates otherwise, as used herein, the terms “we,” “us,” “Seagate,” the “Company” and “our” refer to Seagate Technology Holdings public limited company (“plc”), an Irish public limited company, and its subsidiaries. References to “$” and “dollars” are to United States dollars.

We have compiled the market size information in thisForm 10-K using statistics and other information obtained from several third-party sources.

Various amounts and percentages used in thisForm 10-K have been rounded and, accordingly, they may not total 100%.

Seagate, Seagate Technology, LaCie, Maxtor, Lyve, Cortx and the Spiral Logo, are trademarks or registered trademarks of Seagate Technology LLC or one of its affiliated companies in the United States (“U.S.”) and/or other countries. All other trademarks or registered trademarks are the property of their respective owners.


CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Some of the statements and assumptions included in this

This Annual Report onForm 10-K are contains forward-looking statements within the meaning of Section 27A of the Private Securities Litigation Reform Act of 1933 or Section 21E1995. Forward-looking statements provide current expectations of the Securities Exchange Act of 1934, each as amended, including,future events based on certain assumptions and include any statement that does not directly relate to any historical fact. Forward-looking statements contained in particular,this Annual Report on Form 10-K include, among other things, statements about our plans, strategies and prospects,prospects; market demand for our products,products; shifts in technology,technology; estimates of industry growth,growth; effects of the economic conditions worldwide resulting from the COVID-19 pandemic; our ability to effectively manage our cash liquidity position and debt obligations, and comply with the covenants in our cash liquidity position,credit facilities; our restructuring efforts,efforts; the sufficiency of our sources of cash to meet our cash needs for the next 12 months and our expectations regarding capital expenditures, the potential impact of trade barriers or regulatory actions, such as import/export duties and restrictions, tariffs and quotas imposedexpenditures. Forward-looking statements generally can be identified by the U.S. or other countries in which the Company conducts its business and changes in the regulatory regime governing the flow of data across international borders for the fiscal year ended July 3, 2020. These statements identify prospective information and may include words such as “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “projects,” “may,” “will”“will,” “will continue,” “can,” “could,” or negative of these words, variations of these words and comparable terminology. These forward-looking statements are based on information available to the Company as of the date of this Annual Report onForm 10-K and are based on management’s current views and assumptions. These forward-looking statements are conditioned upon and also involve a number of known and unknown risks, uncertainties and other factors that could cause actual results, performance or events to differ materially from those anticipated by these forward-looking statements. Such risks, uncertainties and other factors may be beyond our control and may pose a risk to our operating and financial condition. Such risks and uncertainties include, but are not limited to:

•the uncertainty in the global economy and adverse changes in the level of economic and political conditions;

activity in the major regions in which we do business;

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

markets and market acceptance of new products;

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

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

•the effects of the COVID-19 pandemic and related individual, business and government responses on the global economy and their impact on the Company’s abilitybusiness, operations and financial results, including impacts to achieve projected cost savings in connection with its restructuring plansthe Company’s supply chain resulting from governments’ policies and consolidation of its manufacturing activities;

approaches to containing COVID-19;

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

•the Company’s ability to successfully qualify, manufacture and sell its storage products particularly new disk drive products with lower cost structures, in increasing capacitiesvolumes on a cost-effective basis and with acceptable quality;

possible excess industry supply both with respect to particular storage products•any price erosion or volatility of sales volumes through the Company’s distributor and competing alternative storage technology solutions;

retail channel;

•disruptions to the Company’s supply chain or production capabilities;

consolidation trendscapabilities, including ongoing shortages of certain materials, any electricity restrictions and increases in the data storage industry;

logistical, materials and operation costs;

Seagate Technology public limited company | 2019 Form 10-K | 1

fluctuations in interest rates;

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

fluctuations•changes in the value of the Company’s investments and the associated investment income;

tax laws, such as global tax developments applicable to multinational businesses; the impact of trade barriers, such as import/export duties and restrictions, sanctions, tariffs and quotas, imposed by the U.S. or other countries in which the Company conducts its business;

the evolving legal and regulatory, economic, environmental and administrative climate in the international markets where the Company operates, including changesoperates;

•the effect of geopolitical uncertainties, such as the Russia-Ukraine conflict, on international commerce, the global economy, and/or our business;
•the difficulties in regulations relating to privacyimplementing a new global enterprise resource planning system; and protection
3
Table of data and environmental matters; and

Contents

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

Information concerning these and the cybersecurity threats and vulnerabilities associated with the Company’s infrastructure updates to its information technology systems.

Information concerningother risks, uncertainties and other factors, among others, that could cause results to differ materially from those projected in such forward-lookingour expectations statements is also set forth in “Item 1A. Risk Factors” of this Annual Report onForm 10-K, which we encourage you to carefully read. These forward-looking statements should not be relied upon as representing our views as of any date subsequent to the date on which they were made and we undertake no obligation to update forward-looking statements to reflect new information or future events or circumstances after the date they were made.

Seagate Technology public limited company | 2019 Form 10-K | 2

except as required by law.


PART I

ITEM 1.

BUSINESS

ITEM 1. BUSINESS
We are a leading provider of data storage technology and infrastructure solutions. Our principal products are hard disk drives, commonly referred to as disk drives, hard drives or HDDs. In addition to HDDs, we produce a broad range of data storage products including solid state drives (“SSDs”), solid state hybrid drives (“SSHDs”), storage subsystems, and offer storage subsystems.

Hard disk drivessolutions such as a scalable edge-to-cloud mass data platform that includes data transfer shuttles and a storage-as-a-service cloud.

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

performance.

Our HDD products are designed for nearlinemass capacity storage and mission critical applications in enterprise servers andlegacy markets. Mass capacity storage systems; edgenon-compute applications, where our products are designed for a wide variety of end user devices involves well-established use cases—such as portable external storage systems, surveillance systems, network-attached storage (“NAS”), digital video recorders (“DVRs”)hyperscale data centers and gaming consoles;public clouds as well as emerging use cases. Legacy markets are those that we continue to sell to but we do not plan to invest in significantly. Our HDD and edge compute applications, where our products are designed primarily for desktop and mobile computing. Our SSD product portfolio is mainly comprised ofincludes Serial Advanced Technology Attachment (“SATA”), Serial Attached SCSI (“SAS”) andNon-Volatile Memory Express (“NVMe”) based designs to support a wide variety of mass capacity and is designed for applications in enterprise servers and storage systems.

legacy applications.

Our enterprise data solutions (“EDS”)systems portfolio includes storage subsystems for enterprises, cloud service providers,scale-out storage servers and original equipment manufacturers (“OEMs”).

Engineered for modularity, mobility, capacity and performance, these solutions include our enterprise HDDs and SSDs, enabling customers to integrate powerful, scalable storage within existing environments or create new ecosystems from the ground up in a secure, cost-effective manner.

Our Lyve portfolio provides a simple, cost-efficient and secure way to manage massive volumes of data across the distributed enterprise. The Lyve platform includes a shuttle solution that enables enterprises to transfer massive amounts of data from endpoints to the core cloud, a storage-as-a-service cloud offering that provides frictionless mass capacity storage at the metro edge, and Cortx, an open-source object storage software optimized for mass capacity and data intensive workloads.
Industry Overview

Data Storage Industry

The data storage industry includes companies that manufacture components or subcomponents designed for data storage devices, and companies that provideas well as providers of storage solutions, software and services for enterprise cloud, big data, computing platforms and consumer markets. The rapid growth inof data generation and the intelligent application of data are driving demand for data storage. As more data is created at endpoints outside traditional data centers, andwhich requires processing at the edge and in the core or cloud, the need for data storage and management between the edge and cloud has also increased. Examples of thisUse cases include connected and autonomous vehicles, smart manufacturing systems and smart cities. We believe the proliferation and personal creation of media-rich digital content, further enabled by fifth-generation wireless (“5G”), technology, the edge, the Internet of thingsThings (“IoT”), machine learning (“ML”) and artificial intelligence (“AI”), will continue to create demand for higher capacity storage solutions. The newresulting mass data ecosystem is expected to require increasing amounts of data storage both at the edge, in the core and in enterprises that store the data.

between.


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Markets

The principal data storage markets include:

Enterprise Storage. We define enterprise

Mass Capacity Storage Markets
Mass capacity storage as dedicatedsupports high capacity, low-cost per terabyte (“TB”) storage area networksapplications, including nearline, video and hyperscale cloudimage applications (“VIA”) and network-attached storage environments. Enterprise(“NAS”) and cloudedge-to-cloud data centers run solutions which are designed for nearline, mission critical and enterprise SSD applications.

storage infrastructures.

Nearline.Nearline applications are defined as those which require highmass capacity devices and mass capacity subsystems that provide end-to-end solutions to businesses for the purpose of modular and scalable storage. Enterprise storage applications require both high-capacity and energy efficient storage solutions. We expect such applications, which includedevices to support low total cost of ownership. Seagate systems offer mass capacity storage solutions that provide foundational infrastructure for public and private clouds. The nearline market includes storage for cloud computing, content delivery, andarchival, backup services willand newer use cases.
VIA and NAS. VIA and NAS drives are specifically designed to ensure the appropriate performance and reliability of the system for video analytics and camera enabled environments or network storage environments. These markets include storage for security and smart video installations.
Edge-to-cloud data storage infrastructures, transport, and activation of mass data. The Seagate Lyve portfolio grew out of our mass capacity storage portfolio. It provides a simple, cost-efficient and secure way to manage, transport and activate massive volumes of data across the distributed enterprise. Among other elements, the Lyve portfolio includes a shuttle solution that enables enterprises to transfer vast amounts of data from endpoints to the core cloud and a storage-as-a-service cloud that provides frictionless mass capacity storage at the metro edge.
Legacy Markets
Legacy markets include consumer, mission critical and client applications. We continue to growsell to these markets but do not plan significant additional investment.
Consumer storage. Consumer applications are externally connected storage, both HDD and drive exabyte demand. Additionally, with the increased requirements forSSD-based, used to provide backup capabilities, augmented storage capacity, or portable storage for PCs, mobile devices and performance driven by the creation and consumption of media-rich content, we expect that the increased exabyte demand will require further buildout of data centers by cloud service providers (“CSPs”) and other enterprises that use high-capacity nearline devices.

gaming consoles.

Mission critical storage. Mission critical applications are defined as those that use high performancevery high-performance enterprise class HDDs and SSDs with sophisticated firmware. Enterprise storage is vitalfirmware to the operation of large-scale enterprise workloads, requiringreliably support very high performance and high reliability storage solutions.workloads. We expect thethat enterprises utilizing dedicated storage area networks will continue to drive market demand for mission critical enterprise storage solutionssolutions.
Client storage. Client applications include desktop and notebook storage that rely on low cost-per-HDD and SSD devices to continue to be driven by enterprises utilizing dedicatedprovide built-in storage, area networks.

Seagate Technology public limited company | 2019 Form 10-K | 3

EdgeNon-Compute. We define edgenon-computedigital video recorder (“DVR”) storage for video streaming in always-on consumer premise equipment and media center, and gaming storage for PC-based gaming systems as well as console gaming applications as solutions designed primarily for consumer electronic devices that require a higher capacity, lowcost-per-gigabyte storage solution, including surveillance, NAS, DVRs and gaming. Consumer solutions support a variety of consumer and industrial needs withboth internal and external storage solutions. Disk Drives for external storage are designed for purposes such as portable external storage, and to augment storage capacity in the consumer’s current desktop, notebook, tablet or mobile phone device.

Edge Compute. We define edge compute applications as solutions designed for desktop and mobile compute applications ranging from traditional laptops to convertible systems. Some edge compute applications rely less onbuilt-in storage and instead rely on cloud storage for long-term archiving.

Enterprise Data Solutions. We define enterprise data solutions as applications that provideend-to-end solutions to businesses for the purpose of modular systems andscale-out storage. Applications can contain HDDs and SSDs and may offer file management systems, software and compute power, enabling both private and public clouds.

options.

Participants in the data storage industry include:

Major subcomponent manufacturers.Companies that manufacture components or subcomponents used in data storage devices or solutions include companies that supply spindle motors, heads and media, and application specific integrated circuits (“ASICs”).

Storage device manufacturers.Companies that transform components into storage products include disk drive manufacturers and semiconductor storage manufacturers whichthat integrate flash memory into storage products such as SSDs.

Storage solutions manufacturers and system integrators.Companies, such as OEMs,Original Equipment Manufacturers (“OEMs”), that bundle and package storage solutions, distributors that integrate storage hardware and software intoend-user applications, CSPscloud service providers (“CSPs”) that provide cloud based solutions to businesses for the purpose ofscale-out storage solutions and modular systems, and producers of solutions such as storage racks.

Hyperscale data centers.Large hyperscale data center companies, many of which are CSPs, are increasingly designing their own storage subsystems and having them built by contract manufacturers for use inside their own data centers. This trend is reshaping the storage system and subsystem market, and driving both innovation in system design and changes in the competitive landscape of large storage system vendors.

Storage services.Companies that provide and host services and solutions, which include storage, backup, archiving, recovery and discovery of data.

Demand for Data Storage

The

In the Seagate-sponsored “Worldwide Global DataSphere Forecast, 2022-2026”, the International Data Corporation (“IDC”) forecasted in its 2018Digitization of the World study that the global datasphere willshould grow from 3384 zettabytes in 20182021 to 175221 zettabytes by 2025.2026. According to
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IDC, we are fast approaching a new era of the data age,Data Age, which we expect will have a positive impact on storage demand. The digital transformation has given rise to many new applications, all of which rely on faster access to and a secure storage of an increasing amountdata proliferating from endpoints through edge to cloud.
The DataSphere Forecaststudy found that data is shifting to both the core and the edge, and by 2026 nearly 65% of data.

the world’s data will be stored in the core and edge, up from 41% in 2016.

As more applications require real-time decision making, moresome data processing and storage is moving near the edge ofcloser to the network which weedge. We believe this will result in a buildup inof private and edge cloud environments that will enable fast and secure access to data throughout the IoT ecosystem.

Factors contributing to the growth of digital content include:

•Creation, sharing and consumption of media-rich content, such as high-resolution photos, high definition videos and digital music through smart phones, tablets, digital cameras, personal video cameras, DVRs, gaming consoles or other digital devices;

•Increasing use of video surveillance and the emergence ofimaging sensors to collect and analyze data used to improve traffic flow, emergency response times and manufacturing production costs, as well as for new security surveillance systems whichthat feature higher resolution digital cameras and thus require larger data storage capacities;

Seagate Technology public limited company | 2019 Form 10-K | 4

•Creation and collection of data through the development and evolution of the IoT ecosystem, big data analytics, artificial intelligenceAI and new technology trends such as self-driving carsautonomous vehicles and drones, smart manufacturing, and smart cities;

cities, as well as emerging trends that converge the digital and physical worlds such as the metaverse or use of digital twins;

•The growing needuse of analytics, especially for analysis of and action uponon data created at the edge instead of processing and analyzing suchat the data at data centers,center, which is particularly the case inimportant for verticals such as autonomous vehicles, property monitoring systems, and smart manufacturingmanufacturing;

•Cloud migration initiatives and others;

Continuedthe ongoing advancement of the cloud, including the build out of large numbers of cloud data centers by CSPs and private companies transitioningon-site data centers into the cloud; and

•Need for protection of increased digital content through redundant storage on backup devices and externally provided storage services.

As a result of these factors, we anticipate that the nature and volume of contentdata being created will require greater storage capability, which is more efficiently and economically facilitated by higher capacity mass storage devices in order to store, aggregate, host, distribute, analyze, manage, protect, backup and use such content.

devices.

In addition, the economics of storage infrastructure are also evolving with theevolving. The utilization of public and private hyperscale storage and open-source solutions is reducing the total cost of ownership of storage while increasing the speed and efficiency with which customers can leverage massive computing and storage devices. Accordingly, we expect these trends will continue to create significant demand for data storage products and solutions going forward.

Demand Trends

We believe that continued growth in digital content creation requireswill require increasingly higher storage capacity in order to store, aggregate, host, distribute, analyze, manage, protect, back up and use such content. We also believe that as architectures evolve to serve thea growing commercial and consumer user base throughout the world, the storage solutions will evolve as well.

Mass capacity is and will continue to be the enabler of scale. We expect increased data creation will lead to the expansion of the need for storage in the form of HDDs, EDSSSDs and SSDs.systems. While the advance of solid state technology in many end markets is expected to increase, we believe that in the foreseeable future, cloud, edge and traditional enterprise edgenon-compute and edge compute markets thatwhich require high-capacity storage solutions will be best served by hard disk drivesHDDs due to their ability to deliver reliable, energy-efficient and the most cost effective reliable andenergy-efficient mass storage devices. We also believe that as hard disk driveHDD capacities continue to increase, a focus exclusively on unit demand does not reflect the increase in demand for exabytes. As demand for higher capacity drives increases, the demand profile has shifted to reflect fewer total HDD units, but with higher average capacity per drive and higher overall exabyte demand.

Industry Supply Balance

From time to time, the storage industry has experienced periods of imbalance between supply and demand. To the extent that the storage industry builds or maintains capacity based on expectations of demand that do not materialize, price erosion may become more pronounced. Conversely, during periods where demand exceeds supply, price erosion is generally muted.


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Our Business

Data Storage Technologies

The design and manufacturing of HDDs depends on highly advanced technology and manufacturing techniques. Therefore, it requires high levels of research and development spending and capital equipment investments. We design, fabricate and assemble a number of the most important components in our disk drives, including read/write heads and recording media. Our design and manufacturing operations are based on technology platforms that are used to produce various disk drive products that serve multiple data storage applications and markets. Our core technology platforms including upcoming innovations like the throughput-optimizing MACH.2 and the high-capacity enabling heated-assisted magnetic reading (“HAMR”), are focused aroundfocus on the areal density of media and read/write head technologies.technologies, including innovations like shingled-magnetic-recording ("SMR") technology, the high-capacity enabling heat-assisted magnetic recording (“HAMR”) technology, and the throughput-optimizing multi actuator MACH.2 technology. This design and manufacturing approach allows us to deliver a portfolio of disk drivestorage products to service a wide range of data storage applications and industries.

Seagate Technology public limited company | 2019 Form 10-K | 5

Disk drives that we manufacture are commonly differentiated by the following key characteristics:

•input/output operations per second (“IOPS”), commonly expressed in megabytes per second, which is the maximum number of reads and writes to a storage location;

•storage capacity, commonly expressed in terabytes (“TB”),TB, which is the amount of data that can be stored on the disk drive;

•spindle rotation speed, commonly expressed in revolutions per minute (“RPM”), which has an effect on speed of access to data;

•interface transfer rate, commonly expressed in megabytes per second, which is the rate at which data moves between the disk drive and the computer controller;

•average seek time, commonly expressed in milliseconds, which is the time needed to position the heads over a selected track on the disk surface;

•data transfer rate, commonly expressed in megabytes per second, which is the rate at which data is transferred to and from the disk drive;

•product quality and reliability, commonly expressed in annualized return rates; and

•energy efficiency, commonly measured by the power output such as energy per TB necessary to operate the disk drive.

Areal density is measured by storage capacity per square inch on the recording surface of a disk. The storage capacity of a disk drive is determined by the size and number of disks it contains as well as the areal density capability of these disks.

We also offer SSDs as part of our storage solutions portfolio. Our portfolio includes devices with SATA, SAS and NVMe interfaces. The SSDs differ from HDDs in that they are without mechanical parts.

SSDs store data on NAND flash memory cells, or metal-oxide semiconductor transistors using a charge on a capacitor to represent a binary digit. SSD technology offers fast access to data and robust performance. SSDs complement mission-critical enterprise applications, hyperscale applications, high-density data centers, cloud environments and web servers.

They are also used in mission-critical enterprise applications, consumer, gaming and NAS applications.

The SSHDs that we manufacture contain a technology that fuses some features of SSDs and HDDs. They include high capacity HDDs with flash memory that acts as a cache to improve performance of frequently accessed data.

data and are primarily targeted at PC gaming applications.

Manufacturing

We primarily design and producemanufacture our own read/write heads and recording media, which are critical technologies for disk drives. This integrated approach enables us to lower costs and to improve the functionality of components so that they work together efficiently.

We believe that because of our vertical design and manufacturing strategy, we are well suitedpositioned to take advantage of the opportunities to leverage the close interdependence of components for disk drives. Our manufacturing efficiency and flexibility are critical elements of our integrated business strategy. We continuously seek to improve our manufacturing efficiency and reduce manufacturing costs by:

•employing manufacturing automation;

•employing machine learning algorithms and artificial intelligence;

•improving product quality and reliability;

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•integrating our supply chain with suppliers and customers to enhance our demand visibility and reduce our working capital requirements;

•coordinating between our manufacturing group and our research and development organization to rapidly achieve volume manufacturing; and

•operating our facilities at optimal capabilities.

capacities.

Seagate Technology public limited company | 2019 Form 10-K | 6

A vertically integrated model, however, tends to have less flexibility when demand moderatesdeclines as it exposes us to higher unit costs when capacity utilization is not optimized.

Components and Raw Materials

Disk drives incorporate certain components, including a head disk assembly and a printed circuit board mounted to the head disk assembly, which are sealed inside a rigid base and top cover containing the recording components in a contamination controlledcontamination-controlled environment. We maintain a highly integrated approach to our business by designing and manufacturing a significant portion of the components we view as critical to our products, such as read/write heads and recording media.

Read/Write Heads.The function of the read/write head is to scan across the disk as it spins, magnetically recording or reading information. The tolerances of read/write heads are extremely demanding and requirestate-of-the-art equipment and processes. Our read/write heads are manufactured with thin-film and photolithographic processes similar to those used to produce semiconductor integrated circuits, though challenges related to magnetic film properties and topographical structures are unique to the disk drive industry. We perform all primary stages of design and manufacture of read/write heads at our facilities. We use a combination of internally manufactured and externally sourced read/write heads, the mix of which varies based on product mix, technology and our internal capacity levels.

Media.Data is written to or read from the media, or disk, as it rotates at very high speeds past the read/write head. The media is made fromnon-magnetic substrates, usually an aluminum alloy or glass and is coated with thin layers of magnetic materials. We use a combination of internally manufactured and externally sourced finished media and aluminum substrates, the mix of which varies based on product mix, technology and our internal capacity levels. We purchase all of our glass substrates from third parties.

Printed Circuit Board Assemblies.The printed circuit board assemblies (“PCBAs”) are comprised of standard and custom ASICs and ancillary electronic control chips. The ASICs control the movement of data to and from the read/write heads and through the internal controller and interface, which communicates with the host computer. The ASICs and control chips form electronic circuitry that delivers instructions to a head positioning mechanism called an actuator to guide the heads to the selected track of a disk where the data is recorded or retrieved. Disk drive manufacturers use one or more industry standard interfaces such as serial advanced technology architecture (“SATA”), small computer system interface (“SCSI”),SATA, SCSI, or SAS to communicate to the host systems.

Head Disk Assembly.The head disk assembly consists of one or more disks attached to a spindle assembly powered by a spindle motor that rotates the disks at a high constant speed around a hub. Read/write heads, mounted on an arm assembly, similar in concept to that of a record player, fly extremely close to each disk surface, and record data on and retrieve it from concentric tracks in the magnetic layers of the rotating disks. The read/write heads are mounted vertically on anE-shaped assembly(“E-block”) that is actuated by a voice-coil motor to allow the heads to move from track to track. TheE-block and the recording media are mounted inside the head disk assembly. We purchase spindle motors from outside vendors and from time to time participate in the design of the motors that go into our products.

Disk Drive Assembly. Following the completion of the head disk assembly, it is mated to the PCBA, and the completed unit goes through extensive defect mapping and machine learning prior to packaging and shipment. Disk drive assembly and machine learning operations occur primarily at our facilities located in China and Thailand. We perform subassembly and component manufacturing operations at our facilities in China, Malaysia, Northern Ireland, Singapore, Thailand and the United States.

Contract Manufacturing.We outsource the manufacturing and assembly of certain components and products to third parties in various countries worldwide. This includes outsourcing the PCBAs used in our disk drives, SSDs and storage subsystems. We continue to participate in the design of our components and products, and we are directly involved in qualifying key suppliers and components used in our products.

Suppliers of Components and Industry Constraints. There are a limited number of independent suppliers of components, such as recording heads and media, available to disk drive manufacturers. Vertically integrated disk drive manufacturers like us, who

Seagate Technology public limited company | 2019 Form 10-K | 7

manufacture their own components, are less dependent on external component suppliers than less vertically integrated disk drive manufacturers. However, certain parts of our business hashave been adversely affected by our suppliers’ capacity constraints in the past and this could occur again.

in the future.

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Commodity and Other Manufacturing Costs. The production of disk drives requires rare earth elements, precious metals, scarce alloys and industrial commodities, which are subject to fluctuations in price and the supply of which has at times been constrained. In addition to increased costs of components and commodities, volatility in fuel and other transportation costs may also increase our costs related to commodities, manufacturing and freight. As a result, we may increase our use of alternative shipment methods to help offset any increase in freight costs, and we will continually review various forms of shipments and routes in order to minimize the exposure to higher freight costs.

Products

We offer a broad range of storage solutions for enterprise, data center, edgenon-computemass capacity storage and edge computelegacy applications. We offer more than one product within each product category and differentiate products on the basis of capacity, performance, product quality, reliability, price, form factor, interface, power consumption efficiency, security features and other customer integration requirements. Our industry is characterized by continuous and significant advances in technology whichthat contribute to rapid product life cycles. Currently our product offerings include:

Mass Capacity Storage
Enterprise Storage

Enterprise Capacity.Nearline HDDs. Our high-capacity enterprise capacity hard drivesHDDs ship in2.5-inch and3.5-inch form factors and in storage capacities of up to 16TB.20TB. These products are designed for mass capacity data storage in the core and at the edge, as well as server environments and cloud systems that require high capacity, enterprise reliability, energy efficiency and integrated security. They are available in SATA and SAS interfaces. We also offerlow-cost storage options designed specifically for active archive storage environments.

Enterprise Performance HDDs andNearline SSDs.We continue to support 10,000 and 15,000 RPM HDDs, which enable increased throughput and improve energy efficiency. Our enterprise SSDs are availabledesigned for high-performance, hyperscale, high-density and cloud applications. They are offered with multiple interfaces, including SAS, SATA, and NVMe and in capacities up to 15TB with endurance options15TB.
Enterprise Nearline Systems. Our systems portfolio provides modular storage arrays, storage server platforms, multi-level configuration for disks (commonly referred as JBODs) and expansion shelves to expand and upgrade data center storage infrastructure and other enterprise applications. They feature speed, scalability and security. Our capacity-optimized systems feature multiple scalable configurations and can accommodate up to 10 drive writes106 20TB drives per day (“DWPD”)chassis. We offer capacity and various interfaces.performance-optimized systems that include all-flash, all-disk and hybrid arrays for workloads demanding high performance, capacity and efficiency.
VIA. Our SSDs deliver the speedvideo and consistency needed for demanding enterprise storage and server applications.

EdgeNon-Compute Applications

Surveillance. Our surveillanceimage HDDs are built to support the high-write workload of analways-on, always-recording video surveillance system.systems. These surveillance optimized drives are built to support the growing needs of the surveillancevideo imaging market with support for multiple streams and capacities up to 16TB.

20TB.

NAS.Our NAS drives are built to support the performance and reliability demanded by small and medium businesses, and incorporate interface software with custom-built health management, error recovery controls, power settings and vibration tolerance. Our NAS HDD solutions are available in capacities up to 16TB.

Video.Our Video HDDs are used in video applications like DVRs and media centers. These disk drives are optimized for video streaming inalways-on applications20TB. We also offer NAS SSDs with capacities up to 4TB2TB.

Legacy Applications
Mission Critical HDDs and SSDs. We continue to support leading-edge digital entertainment.

Gaming.Gaming10,000 and 15,000 RPM HDDs, are specifically optimized for console gaming usage. These products are designedoffered in capacities up to enhance the gaming experience during game-load and game-play and2.4TB, which enable increased throughput while improving energy efficiency. Our enterprise SSDs are available in capacities up to 8TB.

15TB, with endurance options up to 10 drive writes per day and various interfaces. Our SSDs deliver the speed and consistency required for demanding enterprise storage and server applications.

Consumer Solutions.Our external storage solutions, with capacities up to 20TB are shipped, under the Seagate Backup PlusUltra Touch, One Touch, Expansion and ExpansionBasics product lines, as well as under the LaCie and Maxtor brand names. These product lines are available in capacities up to 168TB.name. We strive to deliver the best customer experience by leveraging our core technologies, offering services such as Seagate Recovery Services (data recovery) and partnering with leading brands such as Microsoft’s Xbox, SonySony’s PlayStation and Adobe.

Edge Compute Applications

Desktop HDDs.Disney’s Star Wars and Marvel.

Client Applications. Our3.5-inch desktop drives ship in both traditional HDD and SSHD configurations and offer up to 14TB8TB of capacity. Desktopcapacity, designed for personal computers and workstation applications and our 2.5-inch notebook drives areoffer up to 5TB for HDD and up to 2TB for SSD designed for applications such as personal computers and workstations.

Seagate Technology public limited company | 2019 Form 10-K | 8

Mobile HDDs. Our2.5-inch laptop drives ship in a variety of capacities (up to 5TB) and technologies (HDD and SSHD) to support mobile needs. Used in applications ranging from traditional laptops,notebooks, convertible systems and external storage our drives are built to address a range of performance needs and sizes for affordable, highhigh-capacity storage. Our DVR HDDs are optimized for video streaming in always-on consumer premise equipment applications with capacities up to 6TB. Ourgaming SSDs are specifically optimized internal storage for gaming rigs and are designed to enhance the gaming experience during game load and game play with capacities up to 4TB for SSD.

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Lyve Edge-to-Cloud Mass Capacity Platform
Lyve. Lyve is our new platform built with mass data in mind. These solutions, including modular hardware and software, deliver a portfolio that streamlines data access, transport and management for today’s enterprise.
Cloud. Lyve Cloud storage-as-a-service platform is an S3-compatible storage-only cloud designed to allow enterprises to unlock the value of their massive unstructured datasets. We collaborate with certain partners to maximize accessibility and provide extensive interconnect opportunities for additional cloud services and geographical expansion.
Data Services. Lyve Mobile Data Transfer Services consists of Lyve Mobile modular and scalable hardware, purpose-built for simple and secure mass-capacity edge data storage, lift-and-shift initiatives, and other data movement for the enterprise. These products are cloud-vendor agnostic and can be integrated seamlessly with public or private cloud data centers and providers.
Cortx. Cortx is an intelligent object storage software that is optimized for mass capacity storage.

and data-intensive workloads. This software is open source and has cloud interoperability, including S3-compatibility.

Customers

We sell our products to major OEMs, distributors and retailers.

OEM customers, including large hyperscale data center companies and CSPs, typically enter into master purchase agreements with us. These agreements provide for pricing, volume discounts, order lead times, product support obligations and other terms and conditions including sales programs offered to promote selected products. Deliveries are scheduled only after receipt of purchase orders. In addition, with limited lead-time, customers may defer most purchase orders without significant penalty. Anticipated orders from many of our customers have in the past failed to materialize or OEM delivery schedules have been deferred or altered as a result of changes in their business needs.

Our distributors generally enter intonon-exclusive agreements for the resale of our products. They typically furnish us with anon-binding indication of their near-term requirements and product deliveries are generally scheduled accordingly. The agreements and related sales programs typically provide the distributors with limited rights of return and price protection rights.protection. In addition, we offer sales programs to distributors on a quarterly and periodic basis to promote the sale of selected products in the sales channel.

Our retail channel consists of our branded storage products sold to retailers either by us directly or by our distributors. Retail sales made by us or our distributors typically require greater marketing support, sales incentives and price protection periods.

See “Item 8. Financial Statements and Supplementary Data—Note 13.Business16. Business Segment and Geographic Information” contained in this report for a description of our major customers.

Competition

We compete primarily with manufacturers of hard drives used in the enterprise, edgenon-computemass capacity storage and edge compute applicationslegacy markets, and with other companies in the data storage industry that provide SSDs and EDS.systems. Some of the principal factors used by customers to differentiate among data storage solutions manufacturers are storage capacity, product performance, product quality and reliability, price per unit and price per terabyte,TB, storage/retrieval access times, data transfer rates, form factor, product warranty and support capabilities, supply continuity and flexibility, power consumption, total cost of ownership and brand. While different markets and customers place varying levels of emphasis on these factors, we believe that our products are competitive with respect to many of these factors in the markets that we currently address.

compete in.

Principal Competitors.We compete with manufacturers of storage solutions and the other principal manufacturers in the data storage solution industry include:

including:

Seagate, selling the Seagate, LaCie and Maxtor brands;

•Micron Technology, Inc.;

•Samsung Electronics;

•SK hynix, Inc.;

Toshiba Memory•Kioxia Holdings Corporation;

•Toshiba Corporation; and

•Western Digital Corporation, operating the Western Digital, and Hitachi Global Storage Technologies subsidiaries and SanDisk.

SanDisk brands.

Seagate Technology public limited company | 2019 Form 10-K | 9

Price Erosion.Historically, our industry has been characterized by price declines for data storage products with comparablecapacity,comparablecapacity, performance and feature sets(“ (“like-for-like products”). Price declines forlike-for-like products (“price erosion”) tend to be more pronounced during periods of:

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•economic contraction in which competitors may use discounted pricing to attempt to maintain or gain market share;

•few new product introductions when competitors have comparable or alternative product offerings; and

•industry supply exceeding demand.

Data storage manufacturers typically attempt to offset price erosion with an improved mix of data storage products characterized by higher capacity, better performance and additional feature sets and product cost reductions.

We believe the data storageHDD industry experienced modest price erosion in fiscal years 2019, 20182022 and 2017.

2021.

Product Life Cycles and Changing Technology.Success in our industry has been dependent to a large extent on the ability to balance the introduction and transition of new products withtime-to-volume, performance, capacity and quality metrics at a competitive price, level of service and support that our customers expect. Generally, the drive manufacturer that introduces a new product first benefits from improved product mix, favorable profit margins and less pricing pressure until comparable products are introduced. Changing technology also necessitateson-going investments in research and development, which may be difficult to recover due to rapid product life cycles andor economic declines. Further, there is a continuedcontinuing need to successfully execute product transitions and new product introductions, as factors such as quality, reliability and manufacturing yields continue to be of significant competitive importance.

Seasonality

The disk drive industry traditionally experiences seasonal variability in demand with higher levels of demand in the second half of the calendar year. This seasonality is driven by consumer spending in theback-to-school season from late summer to fall

Cyclicality and the traditional holiday shopping season from fallSeasonality
Our mass capacity markets are subject to winter. Beyond traditional seasonality, variability of sales, which can be relatedattributed to the timing of IT spending or a reflection of cyclical demand from CSPs based on the timing of their procurement and deployment requirements and the supply and demand balance oftheir ability to procure other components needed to build out data center infrastructure. Our legacy markets, such as NANDconsumer storage applications, traditionally experienced seasonal variability in demand with higher levels of demand in the first half of the fiscal year, primarily driven by consumer spending related to back-to-school season and DRAM.

traditional holiday shopping season.

Research and Development

We are committed to developing new component technologies, products, and alternative storage technologies.technologies inclusive of systems, software and other innovative technology solutions to support emerging applications in data use and storage. Our research and development focus isactivities are designed to bring new products to market in high volume, with quality attributes that our customers expect, before our competitors. Part of our product development strategy is to leverage a design platform and/or subsystem within product families to serve different market needs. This platform strategy allows for more efficient resource utilization, leverages best design practices, reduces exposure to changes in demand, and allows for achievement of lower costs through purchasing economies. Our advanced technology integration effort focuses disk drive and component research on recording subsystems, including read/write heads and recording media; market-specific product technology; and technology we believe may lead to new business opportunities. The primary purpose of our advanced technology integration effort is to ensure timely availability of mature component technologies for our product development teams as well as to allow us to leverage and coordinate those technologies in the design centers across our products in order to take advantage of opportunities in the marketplace.

Patents and Licenses

As of June 28, 2019,July 1, 2022, we had approximately 6,0004,800 U.S. patents and 1,300720 patents issued in various foreign jurisdictions as well as approximately 900550 U.S. and 500140 foreign patent applications pending. The number of patents and patent applications will vary at any given time as part of our ongoing patent portfolio management activity. Due to the rapid technological change that characterizes the data storage industry, we believe that, in addition to patent protection, the improvement of existing products, reliance upon trade secrets, protection of unpatented proprietaryknow-how and development of new products are also important to our business in establishing and maintaining a competitive advantage. Accordingly, we intend to continue our efforts to broadly protect our intellectual property, including obtaining patents, where available, in connection with our research and development program.

Seagate Technology public limited company | 2019 Form 10-K | 10

The data storage industry is characterized by significant litigation arising from time to time relating to patent and other intellectual property rights. From time to time, we receive claims that our products infringe patents of third parties. Although we have been able to resolve some of those claims or potential claims without a material adverse effect on us, other claims have resulted in adverse decisions or settlements. In addition, other claims are pending, which if resolved unfavorably to us could have a material adverse effect on our business and results of operations. For more information on these claims, see “Item 8. Financial Statements and Supplementary Data—Note 14.Legal, Environmental and Other Contingencies.” The costs of

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engaging in intellectual property litigation in the past have been, and in the future may be, substantial, irrespective of the merits of the claim or the outcome.

Backlog

In view of industry practice, whereby customers may cancel or defer orders with little or no penalty, we believe backlog for our business is of limited indicative value in estimating future performance and results.

Environmental Matters

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

We have established environmental management systems and continually update environmental policies and standard operating procedures for our operations worldwide. We believe that our operations are in material compliance with applicable environmental laws, regulations and permits. We budget for operating and capital costs on an ongoing basis to comply with environmental laws. If additional or more stringent requirements are imposed on us in the future, we could incur additional operating costs and capital expenditures.

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

While our ultimate costs in connection with these sites are difficult to predict, basedBased on current estimates of cleanup costs and our expected allocation of these costs, we do not expect costs in connection with these sites to be material.

We may be subject to various state, federal and international laws and regulations governing environmental matters, including those restricting the presence of certain substances in electronic products. For example, the European Union (“EU”) has enacted the Restriction of the Use of Certain Hazardous Substances in Electrical and Electronic Equipment (2011/65/EU), which prohibits the use of certain substances, including lead, in certain products, including disk drives and server storage products, put on the market after July 1, 2006. Similar legislation has been or may be enacted in other jurisdictions, including in the United States,U.S., Canada, Mexico, Taiwan, China Japan and others.Japan. The European UnionEU REACH Directive (Registration, Evaluation, Authorization, and Restriction of Chemicals, EC 1907/2006) also restricts substances of very high concern (“SVHCs”) in products.

Employees

At June 28, 2019, If we or our suppliers fail to comply with the substance restrictions, recycle requirements or other environmental requirements as they are enacted worldwide, it could have a materially adverse effect on our business.

Social and Employee Matters
As of July 1, 2022, we employed approximately 40,50040,000 employees and temporary employees worldwide, of which approximately 33,50036,000 were located in our Asia operations. We believe that our employees are crucial to our current success and that our future success will depend, in part, on our ability to attract, retain and retainfurther motivate qualified employees at all levels. We believe that our employee relations are good.

Diversity, Equity & Inclusion. One of our core values is inclusion. We rely on our diverse workforce to develop, deliver and sustain our business strategy and achieve our goals. One way we embrace our diverse employees and promote a culture of inclusion is through the support of employee resource groups (“ERG”). These voluntary, employee-led communities are built on a shared diversity of identity, experience or thought and provide a number of benefits to employees, including professional and leadership development. Seagate’s ERG community encompasses a wide array of diversity, such as LGBTQ+, women, people of color and interfaith, and includes over 26 chapters across six countries. We also support inclusion through active employee communications, unconscious bias education and ongoing efforts to ensure our employees feel safe, respected and welcomed. During fiscal year 2022, we published our third annual Diversity, Equity, and Inclusion (“DEI”) Report, which provides an overview of our DEI efforts and outcomes including demographics on our workforce. The fiscal year 2021 DEI Report is available on our website.
Health & Safety. All our manufacturing sites have health and safety management systems certified to ISO 45001. In addition, we are audited to health and safety standards set forth by the Responsible Business Alliance. Our global health and safety standards, as well as our accompanying management systems, frequently go beyond country or industry-level guidelines to ensure that we keep our employees healthy and safe. We also host regulatory visits that focus on issues such as safety, radiation, fire codes, food and transportation. Through our Environment, Health and Safety (“EHS”) Management Systems, we ensure that the focus remains on the continuous improvement and provide comprehensive health and safety training to our employees. We emphasize e-learning courses as our main vehicle for delivering such training because employees can learn at their own pace. In response to the COVID-19 pandemic and to protect the health and well-being of our employees, customers, suppliers and the communities in which we operate we implemented significant safety protocols over the past two and a half
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years. We continue to ensure that our COVID-19 pandemic protocols remain in place as needed to ensure the health and safety of our employees. We continue to monitor the impact of the COVID-19 pandemic and adjust these measures over time as appropriate to protect the health and well-being of our employees, customers, suppliers and communities.
Development, Retention, Compensation, Benefits & Engagement. Our performance management system is a continuous process that helps team members focus on the right priorities. Meaningful conversations between managers and employees are the foundation of performance management at Seagate. We focus on dialogue centered around manager and employee conversations, and ongoing feedback, to align goals. This approach focuses on achieving high-quality productive dialogue between managers and employees. We also encourage our employees to participate in the many learning opportunities that are available at Seagate. The portfolio of learning and training formats include but are not limited to mentoring and coaching, e-learning opportunities, LinkedIn Learning classroom training, on-the-job training and other strategic internal programs that cover topics ranging from leadership and technical skills to health, safety and the environment. In addition, we are investing in upskilling and re-deploying employees as needed to support our future growth and respond to the changing demands of the business. For example, our internal mobility and career development tool provides Seagate Technology public limited company | 2019 Form 10-K | 11

employees the opportunity to establish networking and mentor connections, identify and participate in internal part-time projects, and explore internal full-time positions.

Our Total Rewards program is designed to attract, motivate and retain talented people in order to successfully meet our business goals. The program includes base pay, annual bonuses, commissions, equity awards, an employee share purchasing plan, retirement savings opportunities and other employee health and wellness benefits. Our compensation programs and guidelines are structured to align pay with performance and aim to provide internally and externally competitive total compensation.

Employee engagement is the psychological commitment and passion that drives discretionary effort. It predicts individual performance and is the measure of the relationship between employees and the Company. Our engagement survey includes facets of the employee experience throughout the employee life cycle. Employee experience is what employees encounter and observe over the course of their career at Seagate. A positive employee experience can have an impact on everything from recruiting to Seagate's bottom line.

In our fiscal year 2022 survey, 92% of our global employees shared their feedback on their experience at Seagate. Following the conclusion of the survey, leaders were provided access to a dashboard with results that shared the key drivers of engagement specific to their own department. Leaders were asked to follow our “Review, Share and Take Action!” process to analyze their results, share and discuss with their teams, and create customized action plans designed to have the greatest impact on engagement for a particular department.
Giving Back. Our community engagement program is designed to provide support to our local communities, with an emphasis on science, technology, engineering and mathematics (“STEM”) and also address health and human services, and environmental opportunities. The program is reflective of Seagate’s vertically integrated model, with multiple large facilities across EMEA, Asia and the United States. Accordingly, the program is highly localized, involving a cross-functional process to identify and execute on opportunities that are meaningful locally.
In general, we maintain an emphasis on STEM, targeting K-12 students, supporting STEM efforts in a way that is age-appropriate and allows for fun as well as learning. In fiscal year 2022, due to the COVID-19 pandemic, Seagate pivoted to virtual engagements and funding of STEM partners as they worked to deliver their programs online or in a socially distanced manner. Seagate also increased support of health & human services partnerships due to the pandemic, such as support of food banks, clinics, and non-profit organizations providing COVID-19 pandemic health care and relief, while sustaining many of our ongoing community partnerships.
Global Citizenship Report
Additional information regarding our environmental, social and governance (“ESG”) commitment and progress can be found on the Global Citizenship section of our website and in our Global Citizenship Annual Report (“GCAR”). Information contained on our website or in our annual GCAR is not incorporated by reference into this or any other report we filed with the Securities and Exchange Commission.
Financial Information

Financial information for our reportable business segment and about geographic areas is set forth in “Item 8. Financial Statements and Supplementary Data-Data—Note 13. 16. Business Segment and Geographic Information.”

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Corporate Information

Seagate Technology Holdings public limited company is a public limited company organized under the laws of Ireland.

Available Information

Availability of Reports. We are a reporting company under the Securities Exchange Act of 1934, as amended (the “1934 Exchange Act”), and we file reports, proxy statements and other information with the U.S. Securities and Exchange Commission (the “SEC”). Because we make filings to the SEC electronically, the public may access this information at the SEC’sSEC's website: www.sec.gov. This site contains reports, proxiesproxy and information statements and other information regarding issuers that file electronically with the SEC.

Website Access. Our website is www.seagate.com. We make available, free of charge at the “Investor Relations” section of our website (investors.seagate.com), our Annual Reports onForm 10-K, Quarterly Reports onForm 10-Q, Current Reports onForm 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the 1934 Exchange Act as soon as reasonably practicable after we electronically file such materials with, or furnish them to, the SEC. Reports of beneficial ownership filed pursuant to Section 16(a) of the 1934 Exchange Act are also available on our website.

Investors. Investors and others should note that we routinely use the Investor Relations section of our website to announce material information to investors and the marketplace. While not all of the information that the Company posts on its corporate website is of a material nature, some information could be deemed to be material. Accordingly, the Company encourages investors, the media and others interested in the Company to review the information that it shares on www.seagate.com. Information in, or that can be accessed through, our website is not incorporated into thisForm 10-K.

Information About Our Executive Officers

The following sets forth the name, age and position of each of the persons who were serving as executive officers as of August 2, 2019.5, 2022. There are no family relationships among any of our executive officers.

Name

Age

Positions

Dr. William D. Mosley

5552

Director and Chief Executive Officer

Gianluca Romano

5350

Executive Vice President and Chief Financial Officer

James J. Murphy(a)

Ravinandan Naik		5160

Executive Vice President, Worldwide SalesStorage Services and Marketing

Chief Information Officer

Jeffrey D. Nygaard

5855

Executive Vice President, Global Operations

and Technology

Katherine E. Schuelke

5956

Senior Vice President, Chief Legal Officer and Corporate Secretary

Ban Seng Teh56Executive Vice President, Global Sales and Marketing

(a)

Mr. Murphy is leaving the Company and will remain for an interim transition period until December 31, 2019.


Dr. William D. Mosley, 52,55, has served as our Chief Executive Officer (“CEO”) since October 2017 and as a member of the Board since July 25, 2017. He was previously our President and Chief Operating Officer (“COO”) from June 2016 to September 2017. He also served as our President of Operations and Technology from October 2013 to June 2016 and as our Executive Vice President of Operations from March 2011 until October 2013. Prior to these positions, Dr. Mosley served as Executive Vice President, Sales and Marketing from February 2009 through March 2011; Senior Vice President of Global Disk Storage Operations from 2007 to 2009; and Vice President of Research and Development, Engineering from 2002 to 2007. He joined Seagate in 1996 as a Senior Engineer with a PhD in solid state physics. From 1996 to 2002, he served at Seagate in varying roles of increasing responsibility until his promotion to Vice President.

Gianluca Romano, 50, 53, has served as our Executive Vice President and Chief Financial Officer since January 2019. From October 2011 to December 2018, Mr. Romano served as Corporate Vice President, Business Finance and Accounting at Micron Technology, Inc.Inc (“Micron”), a producer of computer memory and computer data storage. Prior to his role at Micron, Mr. Romano served as Vice President Finance, Corporate Controller at Numonyx, Inc., a flash memory company which was acquired by Micron in February 2010, from 2008 to 2010. From 1994 until 2008, Mr. Romano held various finance positions at STMicroelectronics, an electronics and semiconductor manufacturer, most recently as Group Vice-President, Central & North Europe Finance Director, Shared Accounting Services Director.

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James J. Murphy, 60,Ravinandan Naik, 51 has served as our Executive Vice President of Worldwide SalesStorage Services and MarketingChief Information Officer (“CIO”) since February 2021. Prior to that Mr. Naik served as Senior Vice President Corporate Strategy and CIO from January 2017. From 20032019 to 2016,February 2021, and Senior Vice President and CIO from June 2017 to January 2019. Prior to joining Seagate in 2017, Mr. MurphyNaik was employed by Western Digital Corporation where he served in a variety of executive leadership roles including President of Western Digital Corporation, Executivethe Senior Vice President of Worldwide Sales & Sales Operations, andTechnology at Katerra, a technology startup in the construction industry. Mr. Naik worked for SanDisk, a supplier of flash storage products, as Senior Vice President and CIO from 2013 to May 2016, and Head

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Table of Asia Pacific sales. Mr. Murphy began his career with IBM in 1984 inContents
of Global Real Estate, Workplace and Corporate Physical Security from January 2012 to April 2016, Vice President and CIO from 2009 to 2013, and Director of the sales organization, whereEnterprise Resource Planning Program from 2007 to 2009. Before that, he held leadership positions at Mercury Interactive, a number of sales roles with increasing responsibilities oversoftware company, Hewlett Packard, an information technology company, and 3Com Corporation, a seven-year period.

digital electronics manufacturer.

Jeffrey D. Nygaard, 55,58, has served as our Executive Vice President, Operations Product Development and Technology Development since November 2018.2018; his areas of responsibility expanded to include Quality in October 2019 and Customer Technical Engagement in April 2020. Mr. Nygaard also served as our Executive Vice President, Global Operations from October 2017 to November 2018; Senior Vice President, Global Operations and Supply Chain from March 2017 to October 2017; Senior Vice President, Recording Head Operations from May 2013 to February 2017; Vice President Slider, HGA, HSA Operations from 2011 to April 2013; Vice President and Country Manager, Thailand and Penang Operations from 2009 to 2011; Vice President and Country Manager, Thailand Operations and Asia Drive Engineering from 2006 to 2009; and Vice President, Product and Process Development from 2004 to 2006. From 1994 to 2006, Mr. Nygaard served in varying roles of increasing responsibilities in engineering at Seagate until his promotion to Vice President. Mr. Nygaard began his career with Raytheon and IBM where he held positions as a design engineer and senior engineer.

Katherine E. Schuelke, 56,59, has served as our Senior Vice President, Chief Legal Officer and Corporate Secretary since June 2017. From 2011 to January 2016, Ms. Schuelke was the Senior Vice President, General Counsel and Secretary at Altera Corporation (“Altera”)., a manufacturer of programmable logic devices. Prior to that, Ms. Schuelke was Vice President, General Counsel, and Secretary at Altera from 2001 to 2011. At Altera, she held other positions of increasing responsibility from 1996 through 2001. Ms. Schuelke began her career at an international law firm.

Ms. Schuelke serves on the board of directors of SiTime Corporation, a provider of silicon timing solutions, and on its Compensation and Nominating and Corporate Governance Committees.

Ban Seng Teh, 56, has served as our Executive Vice President of Global Sales and Marketing since July 2022. Prior to that, Mr. Teh served as Executive Vice President of Global Sales and Sales Operations from February 2021 to July 2022 and Senior Vice President of Global Sales and Sales Operations from November 2014 to February 2021. Mr. Teh also served as our Senior Vice President of Asia-Pacific and Japan Sales and marketing from July 2010 to November 2014. Mr. Teh joined Seagate Technology public limited company | 2019 Form 10-K | 13

in 1989 as a field customer engineer and has served in varying roles of increasing responsibilities, including as Vice President, Asia Pacific Sales and Marketing (Singapore) from January 2008 to July 2010; Vice President, Sales Operations from 2006 to 2008; Vice President, Asia Pacific Sales from 2003 to 2006; Director, Marketing and APAC Distribution Sales from 1999 to 2003; and Country Manager, South Asia Sales from 1996 to 1999.

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ITEM 1A.

RISK FACTORS

ITEM 1A.RISK FACTORS
Summary of Risk Factors
The following is a summary of the principal risks and uncertainties that could materially adversely affect our business, results of operations, financial condition, cash flows, brand and/or the price of our outstanding ordinary shares, and make an investment in our ordinary shares speculative or risky. You should read this summary together with the more detailed description of each risk factor contained below. Additional risks beyond those summarized below or discussed elsewhere in this Annual Report on Form 10-K may apply to our business and operations as currently conducted or as we may conduct them in the future or to the markets in which we currently, or may in the future, operate.
Risks Related to our Business, Operations and Industry
•Our ability to increase our revenue and maintain our market share depends on our ability to successfully introduce and achieve market acceptance of new products on a timely basis. If our products do not keep pace with customer requirements, our results of operations will be adversely affected.
•We operate in highly competitive markets and our failure to anticipate and respond to technological changes and other market developments, including price, could harm our ability to compete.

compete.

•We face intense competition in the data storage industry. Our principal sources of competition include:

disk drive and SSD manufacturers, such as Micron Technology, Inc., Samsung Electronics, SK hynix, Inc., Toshiba Corporation, Toshiba Memory Holdings Corporation and Western Digital Corporation; and

companies that provide storage subsystems and components to OEMs, including electronic manufacturing services (“EMS”) and contract electronic manufacturing (“CEM”).

The markets for our data storage products are characterized by technological change, which is driven in partmay be adversely affected by the adoptionloss of, new industry standards. These standards provide mechanisms to ensure technology component interoperability but they also hinder our ability to innovate or differentiate our products. When this occurs, our products may be deemed commodities, which could result in downward pressure on prices.

We also experience competition from other companies that produce alternative storage technologies such as flash memory, where increasing capacity, decreasing cost, energy efficiency and improvements in performance have resulted in increased competition with our lower capacity, smaller form factor disk drives. Some customers for both enterprise and edge compute applications have adopted SSDs as an alternative to hard drives in certain applications. Further adoption of alternative storage technologies may impact the competitivenessreduced, delayed or canceled purchases by, one or more of our product portfoliokey customers.

•We are dependent on sales to distributors and reduce our market share. Any resultingretailers, which may increase in competition could have a material adverse effect on our business, financial conditionprice erosion and results of operations.

In addition, the barriers to entry into our markets could be lowered, allowing large EMS and CEM companies that utilize general-purpose design skills to enter our markets and reduce the valuevolatility of our specialized research and design skills. If our markets become more commoditized and we fail to deliver innovative, alternative products to our customers or match the price declines or cost efficiencies, we will have difficulty competing against the large EMS and CEM companies. This could result in lower profit margins or a loss of market share. Any significant decline in our market share in any of our principal markets would adversely affect our results of operations.

sales.

•We must plan our investments in our products and incur costs before we have customer orders or know about the market conditions at the time the products are produced. If we fail to predict demand accurately for our products or if the markets for our products change, we may be unable to meet demand or we may have insufficient demand, which may materially adversely affect our financial condition and results of operations.

Our industry operates primarily on quarterly purchasing cycles, with most of the orders typically coming at the end of each quarter. Our manufacturing process requires us to make significant product-specific investments in inventory each quarter for production in that quarter or a specific quarter in the future. As a result, we incur inventory and manufacturing costs in advance of anticipated sales that may never materialize or that may be substantially lower than expected. If actual demand for our products is lower than the forecast, we may also experience higher inventory carrying costs, manufacturing rework costs and product obsolescence. Conversely, if we underestimate demand, we may have insufficient inventory to satisfy demand and may have to forego sales.

Other factors that may affect our ability to anticipate or meet the demand for our products and adversely affect our results of operations include:

operations.

competitive product announcements or technological advances that result in excess supply when customers cancel purchases in anticipation of newer products;

variable demand resulting from unanticipated upward or downward pricing pressures;

our ability to successfully qualify, manufacture and sell our data storage products;

changes in our product mix, which may adversely affect our gross margins;

manufacturing delays or interruptions, particularly at our manufacturing facilities in China, Malaysia, Northern Ireland, Singapore, Thailand or the United States;

Seagate Technology public limited company | 2019 Form 10-K | 14

limited access to components that we obtain from a single or a limited number of suppliers; and

the impact of changes in foreign currency exchange rates on the cost of producing our products and the effective price of our products to foreign consumers.

In addition, we derive a portion of our revenues in each quarter from a number of relatively large orders. If one or more of our key customers decides to defer or cancel a purchase order or delay product acceptance in any given quarter, our revenues for that quarter may be significantly reduced and fall below our expectations. Conversely, if one of our key customers unexpectedly increases its orders, we may be unable to produce the additional product volumes in a timely manner or take advantage of any overall increased market demand. This could damage our customer relationships and reputation, which may adversely affect our results of operations.

•Changes in demand for computer systems, anddata storage subsystems and consumer electronic devices may in the future cause a decline in demand for our products.

Our products are components in computers, data storage systems and consumer electronic devices. Historically, the demand for these products has been volatile. Unexpected slowdowns in demand for computers, storage subsystems, or consumer electronic devices generally result in sharp declinesan increase in demand for our products. Declinesproducts that we are unable to meet.

•We have a long and unpredictable sales cycle for nearline storage solutions, which impairs our ability to accurately predict our financial and operating results in any period and may adversely affect our ability to forecast the need for investments and expenditures.
•We experience seasonal declines in the sales of our consumer spendingproducts during the second half of our fiscal year which may adversely affect our results of operations.
•We may not be successful in our efforts to grow our systems, SSD and Lyve revenues.
•Our worldwide sales operations subject us to risks that may adversely affect our business related to disruptions in international markets, currency exchange fluctuations, increased costs, and global health outbreaks.
•The ongoing COVID-19 pandemic has impacted our business, operating results and financial condition, as well as the operations and financial performance of many of the customers and suppliers in industries that we serve. We are unable to predict the extent to which the pandemic and related effects will adversely impact our business operations, financial performance, results of operations, financial position and the achievement of our strategic objectives.
•If we do not control our costs, we will not be able to compete effectively.
Risks Associated with Supply and Manufacturing
•Shortages or delays in the receipt of, or cost increases in, critical components, equipment or raw materials necessary to manufacture our products, may cause us to suffer lower operating margins, production delays and other material adverse effects.
•Shortages or delays in critical components, as well as reliance on single-source suppliers, can affect our production and development of products and may harm our operating results.
•If revenues fall or customer demand decreases significantly, we may not meet all of our purchase commitments to certain suppliers.
•Due to the complexity of our products, some defects may only become detectable after deployment.
Risks Related to Human Capital
•The loss of or inability to attract, retain and motivate key executive officers and employees could negatively impact our business prospects.
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•We are subject to risks related to corporate and social responsibility and reputation.
Risks Related to Financial Performance or General Economic Conditions
•We may not be able to generate sufficient cash flows from operations and our investments to meet our liquidity requirements, including servicing our indebtedness.
•We are subject to counterparty default risks.
•Our quarterly results of operations fluctuate, sometimes significantly, from period to period, and may cause our share price to decline.
•Any cost reduction initiatives that we undertake may not deliver the results we expect, and these actions may adversely affect our business.
•Changes in the macroeconomic environment may in the future negatively impact our results of operations.
•The effect of geopolitical uncertainties, war, terrorism, natural disasters, public health issues and other circumstances, on national and/ or international commerce and on the systemsglobal economy, could materially adversely affect our results of operations and devicesfinancial condition.
Legal, Regulatory and Compliance Risks
•Our business is subject to various laws, regulations, governmental policies, litigation, governmental investigations or governmental proceedings that incorporatemay cause us to incur significant expense or adversely impact our results or operations and financial condition.
•Some of our products and services are subject to export control laws and other laws affecting the countries in which our products and services may be sold, distributed, or delivered, and any changes to or violation of these laws could have a material adverse effect on demand for our productsbusiness, results of operations, financial condition and cash flows.
•Changes in U.S. trade policy, including the imposition of sanctions or tariffs and the resulting consequences, may have a material adverse impact on our business and results of operations.
•We may be unable to protect our intellectual property rights, which could adversely affect our business, financial condition and results of operations.

Sales to the edge compute market remain an important part of our business. This market, however, has been, and we expect it to continue to be, adversely affected by:

announcements or introductions of major new operating systems or semiconductor improvements or shifts in consumer preferences and behavior, such as the shift to tablet computers, smart phones, NAND flash memory or similar devices;

longer product life cycles; and

changes in macroeconomic conditions that cause consumers to spend less, such as the imposition of new tariffs and increased laws and regulations.

We believe these announcements and introductions from time to time have caused consumers to defer or cancel their purchases, making certain inventory obsolete. Whenever an oversupply of products in the market causes participants in our industry to have higher than anticipated inventory levels, we experience even more intense price competition from other manufacturers than usual, which may materially adversely affect our financial results. We believe that the deterioration of demand for disk drives in the edge compute market has accelerated, and this deterioration may continue or further accelerate, which could cause our operating results to suffer.

In addition, the demand for edgenon-compute products is volatile. This volatility may be exacerbated by competing alternative storage technologies, such as flash memory, which meet customers’ cost and capacity metrics. Unpredictable fluctuations in demand for our products or rapid shifts in demand from our products to alternative storage technologies in new edgenon-compute applications could materially adversely impact our future results of operations.

The Enterprise Storage market for disk drives has been adversely affected by the growth of the utilization of NAND flash memory in mission critical applications. This deterioration of the Enterprise Storage disk drive market could cause our operating results to suffer. An acceleration of the pace of migration of the Enterprise Storage market to NAND flash memory products may materially adversely affect our financial results.

•We are dependent on our long-term investmentsat times subject to manufacture adequate products. Our investment decisions in adding new assemblyintellectual property proceedings and test capacity require significant planning and lead-time, and a failure to accurately forecast demand for our productsclaims which could cause us to over-investincur significant additional costs or under-invest,prevent us from selling our products, and which would leadcould adversely affect our results of operations and financial condition.

•Our business and certain products and services depend in part on IP and technology licensed from third parties, as well as data centers and infrastructure operated by third parties.
Risks Related to excess capacity, under-utilization charges, impairments orInformation Technology, Data and Information Security
•We could suffer a loss of salesrevenue and revenue opportunities.

Seagate Technology public limited company | 2019 Form 10-K | 15

increased costs, exposure to significant liability including legal and regulatory consequences, reputational harm and other serious negative consequences in the event of cyber-attacks, ransomware or other cyber security breaches or incidents that disrupt our operations or result in unauthorized access to, or the loss, corruption, unavailability or dissemination of proprietary or confidential information of our customers or about us or our customers or other third parties.

•We must successfully maintain and upgrade our IT systems, and our failure to do so could have a material adverse effect on our business, financial condition and results of operations.
Risks Related to Owning our Ordinary Shares
•The price of our ordinary shares may be volatile and could decline significantly.
•Any decision to reduce or discontinue the payment of cash dividends to our shareholders or the repurchase of our ordinary shares pursuant to our previously announced share repurchase program could cause the market price of our ordinary shares to decline significantly.
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RISKS RELATED TO OUR BUSINESS, OPERATIONS AND INDUSTRY

Our ability to increase our revenue and maintain our market share depends on our ability to successfully introduce and achieve market acceptance of new products on a timely basis.

basis. If our products do not keep pace with customer requirements, our results of operations will be adversely affected.

The markets for our products are characterized by rapid technological change, frequent new product introductions and technology enhancements, uncertain product life cycles and changes in customer demand.

The success of our products and services also often depends on whether our offerings are compatible with our customers’ or third-parties’ products or services and their changing technologies. Our customers demand new generations of storage products as advances in computer hardware and software have created the need for improved storage, with features such as increased storage capacity, enhanced security, energy efficiency, improved performance and reliability and lower cost. We, and our competitors, have developed improved products, and we will need to continue to do so in the future.

Historically, our results of operations have substantially depended upon our ability to be among thefirst-to-market with new data storage product offerings. We may face technological, operational and financial challenges in developing new products. In addition, our investments in new product development may not yield the anticipated benefits. Our market share, revenue and results of operations in the future may be adversely affected if we fail to:

•develop new products, identify business strategies and timely introduce competitive product offerings to meet technological shifts, or we are unable to execute successfully;

•consistently maintain ourtime-to-market performance with our new products;

•produce these products in adequate volume;

•meet specifications or satisfy compatibility requirements;

•qualify these products with key customers on a timely basis by meeting our customers’ performance and quality specifications; or

•achieve acceptable manufacturing yields, quality and costs with these products.

Accordingly, we cannot accurately determine the ultimate effect that our new products will have on our results of operations. Our failure to accurately anticipate customers’ needs and accurately identify the shift in technological changes could materially adversely affect our long-term financial results.

In addition, the limited numberconcentration of high-volume OEMscustomers in our largest end markets magnifies the potential effect of missing a product qualification opportunity. If the delivery of our products is delayed, our OEM customers may use our competitors’ products to meet their production requirements.

We cannot assure you that we will be among the leaders intime-to-market with new products or that we will be able to successfully qualify new products with our customers in the future. If our new products are not successful, our future results of operations may be adversely affected.

If our products do not keep pace with technological changes, our results of operations will be adversely affected.

Our customers demand new generations of storage products as advances in computer hardware and software have created the need for improved storage products, with features such as increased storage capacity, enhanced security, improved performance and reliability and lower cost. We, and our competitors, have developed improved products, and we will need to continue to do so in the future. If we are unable to develop new products, identify business strategies and timely introduce competitive product offerings to meet technological shifts, our business and results of operations may be adversely affected.

When we develop new products with higher capacity and more advanced technology, our results of operations may decline because the increased difficulty and complexity associated with producing these products increases the likelihood of reliability, quality or operability problems. If our products experience increases in failure rates, are of low quality or are not reliable, customers may reduce their purchases of our products, our factory utilization may decrease and our manufacturing rework and scrap costs and our service and warranty costs may increase. In addition, a decline in the reliability of our products may make it more difficult for us to effectively compete with our competitors.

Additionally, we may be unable to produce new products that have higher capacities and more advanced technologies in the volumes and timeframes that are required to meet customer demand. We are transitioning to key areal density recording technologies that use HAMR technology to increase HDD capacities. If our transitions to more advanced technologies, including the transition to HDDs utilizing HAMR technology, require development and production cycles that are longer than anticipated or if we otherwise fail to implement new HDD technologies successfully, we may lose sales and market share, which could significantly harm our financial results.

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We may not be able to generate sufficient cash flows from operations and our investments to meet our liquidity requirements, including servicing our indebtedness.

Our business may not generate sufficient cash flows to enable us to meet our liquidity requirements, including working capital, capital expenditures, product development efforts, investments, servicing our indebtedness and other general corporate requirements. If we cannot fund our liquidity requirements, we may have to reduce or delay capital expenditures, product development efforts, investments and other general corporate expenditures. We cannot assure you that any of these remedies would, if necessary,we will be effected on commercially reasonable terms, or at all,among the leaders in time-to-market with new products or that they would permit uswe will be able to meetsuccessfully qualify new products with our obligations.

customers in the future. If our new products are not successful, our future results of operations may be adversely affected.

We are leveragedoperate in highly competitive markets and require significant amounts of cashour failure to service our debt. Our debtanticipate and debt service requirementsrespond to technological changes and other market developments, including price, could adversely affectharm our ability to operatecompete.
We face intense competition in the data storage industry. Our principal sources of competition include HDD and SSD manufacturers, and companies that provide storage subsystems, including electronic manufacturing services and contract electronic manufacturing.
The markets for our businessdata storage products are characterized by technological change, which is driven in part by the adoption of new industry standards. These standards provide mechanisms to ensure technology component interoperability but they also hinder our ability to innovate or differentiate our products. When this occurs, our products may be deemed commodities, which could result in downward pressure on prices.
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We also experience competition from other companies that produce alternative storage technologies such as flash memory, where increasing capacity, decreasing cost, energy efficiency and improvements in performance have resulted in increased competition with our lower capacity, smaller form factor disk drives and a declining trend in demand for HDDs in our legacy markets. Some customers for both mass capacity storage and legacy markets have adopted SSDs as an alternative to hard drives in certain applications. Further adoption of SSDs or other alternative storage technologies may limit our ability to take advantagetotal addressable HDD market, impact the competitiveness of potential business opportunitiesour product portfolio and reduce our options for capital allocation. Our high level of debt presents the following risks:

we are required to use a substantial portion of our cash flow from operations to pay principal and interest on our debt, thereby reducing the availability of our cash flow to fund working capital, capital expenditures, product development efforts, strategic acquisitions, investments and alliances and other general corporate requirements;

our substantial leverage increases our vulnerability to economic downturns and adverse competitive and industry conditions andmarket share. Any resulting increase in competition could place us at a competitive disadvantage compared to those of our competitors that are less leveraged;

our debt service obligations could limit our flexibility in planning for, or reacting to, changes in our business and our industry and could limit our ability to pursue other business opportunities, borrow more money for operations or capital in the future and implement our business strategies;

our level of debt may restrict us from raising additional financing on satisfactory terms to fund working capital, capital expenditures, product development efforts, strategic acquisitions, investments and alliances and other general corporate requirements; and

covenants in our debt instruments limit our ability to pay future dividends or make other restricted payments and investments.

In addition, in the event that we need to refinance all or a portion of our outstanding debt as it matures or incur additional debt to fund our operations, we may not be able to obtain terms as favorable as the terms of our existing debt or refinance our existing debt at all. If prevailing interest rates or other factors result in higher interest rates upon refinancing, then the interest expense relating to the refinanced debt would increase. Furthermore, if any rating agency changes our credit rating or outlook, our debt and equity securities could be negatively affected, which could adversely affect our ability to refinance existing debt or raise additional capital.

We may not be successful in our efforts to grow our EDS and SSD revenues.

We have made and continue to make investments to grow our EDS and SSD revenues. Our ability to grow EDS and SSD revenues is subject to the following risks:

we may be unable to accurately estimate and predict data center capacity and requirements;

we may not be able to offer compelling solutions to enterprises and consumers; and

our cloud systems revenues generally have a longer sales cycle, and growth is likely to depend on relatively large customer orders, which may increase the variability of our results of operations and the difficulty of matching revenues with expenses.

Our results of operations and share price may be adversely affected if we are not successful in our efforts to grow our revenues as anticipated. In addition, our growth in these markets may bring us into closer competition with some of our customers or potential customers, which may decrease their willingness to do business with us.

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Changes in the macroeconomic environment may in the future negatively impact our results of operations.

Changes in macroeconomic conditions may affect consumer and enterprise spending, and as a result, our customers may postpone spending in response to volatility in credit and equity markets, negative financial news and/or declines in income or asset values, all of which may have a material adverse effect on our business, financial condition and results of operations.

We may be adversely affected by the loss of, or reduced, delayed or canceled purchases by, one or more of our key customers.
Some of our key customers such as OEM customers including large hyperscale data center companies and CSPs account for a large portion of our revenue in our mass capacity markets. While we have long-standing relationships with many of our customers, if any key customers were to significantly reduce, defer or cancel their purchases from us or delay product acceptances, or we were prohibited from selling to those key customers, our results of operations would be adversely affected. Although sales to key customers may vary from period to period, a key customer that permanently discontinues or significantly reduces its relationship with us, or that we are prohibited from selling to, could be difficult to replace. In line with industry practice, new key customers usually require that we pass a lengthy and rigorous qualification process. Accordingly, it may be difficult or costly for us to attract new key customers.Conversely, if one of our key customers unexpectedly increases its orders, we may be unable to produce the additional product volumes in a timely manner or take advantage of any overall increased market demand. This could damage our customer relationships and reputation, which may adversely affect our results of operations. Additionally, some of our key customers are subject to cyclical demand which may result in variability of their orders and timing of their purchase with us and if one of our key customers unexpectedly reduces, delays or cancels orders, our revenues and results of operations may be adversely affected.
Furthermore, if there is consolidation among our customer base, our customers may be able to command increased leverage in negotiating prices and other terms of sale, which could adversely affect our profitability. Furthermore, if such customer pressures require us to reduce our pricing such that our gross margins are diminished, it might not be feasible to sell to a particular customer, which could result in a decrease in our revenue. Consolidation among our customer base may also lead to reduced demand for our products, replacement of our products by the combined entity with those of our competitors and cancellations of orders, each of which could adversely affect our results of operations. If a significant transaction or regulatory impact involving any of our key customers results in the loss of or reduction in purchases by these key customers, it could have a materially adverse effect on our business, results of operations and financial condition.
We are dependent on sales to distributors and retailers, which may increase price erosion and the volatility of our sales.
A substantial portion of our sales has been to distributors and retailers of disk drive products. Certain of our distributors and retailers may also market competing products. We face significant competition in this distribution channel as a result of limited product qualification programs and a focus on price, terms and product availability. Sales volumes through this channel are also less predictable and subject to greater volatility. In addition, deterioration in business and economic conditions could exacerbate price erosion and volatility as distributors or retailers lower prices to compensate for lower demand and higher inventory levels. Our distributors’ and retailers’ ability to access credit to fund their operations may also affect their purchases of our products. If prices decline significantly in this distribution channel or our distributors or retailers reduce purchases of our products or if distributors or retailers experience financial difficulties or terminate their relationships with us, our revenues and results of operations would be adversely affected.
We must plan our investments in our products and incur costs before we have customer orders or know about the market conditions at the time the products are produced. If we fail to predict demand accurately for our products or if the markets for our products change, we may be unable to meet demand or we may have insufficient demand, which may materially adversely affect our financial condition and results of operations.
Our manufacturing process requires us to make significant product-specific investments in inventory for production at least three to six months in advance. As a result, we incur inventory and manufacturing costs in advance of anticipated sales that may never materialize or that may be substantially lower than expected. If actual demand for our products is lower than the forecast, we may also experience higher inventory carrying costs, manufacturing rework costs and product obsolescence. Conversely, if we underestimate demand, we may have insufficient inventory to satisfy demand and may have to forego sales.
Other factors that have affected and may continue to affect our ability to anticipate or meet the demand for our products and adversely affect our results of operations include:
•competitive product announcements or technological advances that result in excess supply when customers cancel purchases in anticipation of newer products;
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•variable demand resulting from unanticipated upward or downward pricing pressures;
•our ability to successfully qualify, manufacture and sell our data storage products;
•changes in our product mix, which may adversely affect our gross margins;
•key customers deferring or canceling purchases or delaying product acceptances, or unexpected increases in their orders;
•manufacturing delays or interruptions, particularly at our manufacturing facilities in China, Malaysia, Northern Ireland, Singapore, Thailand or the United States;
•limited access to components that we obtain from a single or a limited number of suppliers; and
•the impact of changes in foreign currency exchange rates on the cost of producing our products and the effective price of our products to non-U.S. customers.
Changes in demand for computer systems, data storage subsystems and consumer electronic devices may in the future cause a decline in demand for our products, or an increase in demand for our products that we are unable to meet.
Our products are components in computers, data storage systems and consumer electronic devices. Historically, the demand for these products has been volatile. Unexpected slowdowns in demand for computers, data storage subsystems or consumer electronic devices generally result in sharp declines in demand for our products. Other factorsDeclines in customer spending on the systems and devices that incorporate our products could have a material adverse effect on demand for our products and on our financial condition and results of operations include conditions in the labor market, healthcare costs, access to credit, consumer confidence and other macroeconomic factors affecting consumer spending behavior.

Macroeconomic developments such as the pending withdrawal of the United Kingdom from the European Union, slowing economies in parts of Asia and South America or increased tariffs between the U.S. and China, Mexico and other countries could negatively affect our business, operating results or financial condition which, in turn, could adversely affect the price of our ordinary shares. A general weakening of, and related declining corporate confidence in, the global economy or the curtailment in government or corporate spending could cause current or potential customers to reduce their IT budgets or be unable to fund data storage systems, which could cause customers to delay, decrease or cancel purchases of our products or cause customers not to pay us or to delay paying us for previously purchased products and services.

Our quarterly results of operations fluctuate, sometimes significantly, from period to period, and may cause our share price to decline.

Our quarterly revenue and results of operations may fluctuate, sometimes significantly, from period to period. These fluctuations, which we expect to continue, may be precipitated by a variety of factors, including:

uncertainty inoperations. Uncertain global economic and politicalbusiness conditions which may posecan exacerbate these risks.

We are dependent on our long-term investments to manufacture adequate products. Our investment decisions in adding new assembly and test capacity require significant planning and lead-time, and a riskfailure to the overall economy and adversely affect our customers’ purchasing behavior;

adverse changes in the level of economic activity in the major regions in which we do business;

competitive pressures resulting in lower selling prices by our competitors which may shift demand away from our products toward those of our competitors;

delays or problems in our introduction of new, more cost-effective products, the inability to achieve high production yields or delays in customer qualification or initial product quality issues;

changes in purchasing patterns of our customers;

application of new or revised industry standards;

disruptions in our supply chain;

increased costs or adverse changes in availability of supplies of raw materials or components;

the impact of corporate restructuring activities that we have and may continue to engage in;

changes in the demand for the computer systems and data storage products that contain our products due to seasonality, economic conditions and other factors;

shifting trends in customer demand which, when combined with overproduction of particular products, particularly when the industry is served by multiple suppliers, results in unfavorable supply and demand imbalances;

our high proportion of fixed costs, including research and development expenses;

any impairments in goodwill or other long-lived assets;

announcements of new products, services or technological innovations by us or our competitors;

changes in tax laws, regulatory requirements, including export regulations or tariffs, or accounting standards; and

adverse changes in the performance of our products.

As a result, we believe thatquarter-to-quarter and year-over-year comparisons of our revenue and results of operations may not be meaningful, and that these comparisons may not be an accurate indicator of our future performance. Our results of operations in one or more future quarters may fail to meet the expectations of investment research analysts or investors, which could cause an immediate and significant decline in our market value.

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We experience seasonal declines in the sales of our products during the second half of our fiscal year which may adversely affect our results of operations.

Sales of computers, storage subsystems and consumer electronic devices tend to be seasonal, and therefore, we expect to continue to experience seasonality in our business as we respond to variations in our customers’ demand for our products. In particular, we anticipate that sales of our products will continue to be lower during the second half of our fiscal year. In the edge compute and edgenon-compute market applications of our data storage business, this seasonality is partially attributable to the historical trend of our customers’ increased sales of desktop computers, notebook computers and consumer electronics during theback-to-school and winter holiday season. In the enterprise storage market, our sales are seasonal because of the capital budgeting and purchasing cycles of our end users. We also experience seasonal reductions in the business activities of our customers during the summer months, particularly in Europe, and the impact of international holidays like Chinese New Year, typically result in lower earnings during those periods. Since our working capital needs peak during periods in which we are increasing production in anticipation of orders that have not yet been received, our results of operations will fluctuate seasonally even if the forecastedaccurately forecast demand for our products proves accurate. Furthermore, it is difficult forcould cause us to evaluateover-invest or under-invest, which would lead to excess capacity, under-utilization charges, impairments or loss of sales and revenue opportunities.

Sales to the degreelegacy markets remain an important part of our business. These markets, however, have been, and we expect them to continue to be, adversely affected by:
•announcements or introductions of major new operating systems or semiconductor improvements or shifts in customer preferences, performance requirements and behavior, such as the shift to tablet computers, smart phones, NAND flash memory or similar devices that meet customers’ cost and capacity metrics;
•longer product life cycles; and
•changes in macroeconomic conditions that cause customers to spend less, such as the imposition of new tariffs, increased laws and regulations, and increased unemployment levels.
We believe that the deterioration of demand for disk drives in certain of the legacy markets has accelerated, and this deterioration may continue or further accelerate, which this seasonalitycould cause our operating results to suffer.
In addition, we believe announcements regarding competitive product introductions from time to time have caused customers to defer or cancel their purchases, making certain inventory obsolete. Whenever an oversupply of products in the market causes our industry to have higher than anticipated inventory levels, we experience even more intense price competition from other manufacturers than usual, which may materially adversely affect our business in future periods because of the rate and unpredictability of product transitions and new product introductions, particularly in the edgenon-compute market, as well as macroeconomic conditions.

financial results.

We have a long and unpredictable sales cycle for enterprise datanearline storage solutions, which impairs our ability to accurately predict our financial and operating results in any periodsperiod and may adversely affect our ability to forecast the need for investments and expenditures.

Our enterprise datanearline storage solutions are technically complex and we typically supply them in high quantities to a small number of customers. Many of our products are also tailored to meet the specific requirements of individual customers, and are often integrated by our customers into the systems and products that they sell. Factors that affect the length of our sales cycle include:

•the time required for developing, testing and evaluating our products before they are deployed;

•the size of the deployment; and

•the complexity of system configuration necessary to deploy our products.

As a result, our sales cycle for enterprise datanearline storage solutions is often in excess ofcould exceed one year and frequently unpredictable. Additionally, our nearline storage solutions is subject to variability of sales primarily due to the timing of IT spending or a reflection of cyclical demand from CSPs based on the timing of their procurement and deployment requirements and their ability to procure other components needed to build out data center infrastructure. Given the length of development and qualification programs and unpredictability of the sales cycle, we may be unable to accurately forecast product demand, which may result in lost sales or excess inventory and associated inventory reserves or write-downs, each of which could harm our business, financial condition and results of operations.


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We may be adversely affected by the loss of, or reduced, delayed or canceled purchases by, one or more of our key customers.

Some of our key customers account for a large portion of our revenue. While we have long-standing relationships with many of our customers, if any of our key customers were to significantly reduce their purchases from us, our results of operations would be adversely affected. Although sales to key customers may vary from period to period, a key customer that permanently discontinues or significantly reduces its relationship with us could be difficult to replace. In line with industry practice, new key customers usually require that we pass a lengthy and rigorous qualification process at the customer’s expense. Accordingly, it may be difficult or costly for us to attract new key customers.

Additionally, if there is consolidation among our customer base, our customers may be able to command increased leverage in negotiating prices and other terms of sale, which could adversely affect our profitability. Furthermore, if, as a result of increased leverage, customer pressures require us to reduce our pricing such that our gross margins are diminished, it might not be feasible to sell our products to a particular customer, which could result in a decrease in our revenue. Consolidation among our customer base may also lead to reduced demand for our products, replacement of our products by the combined entity with those of our competitors and cancellations of orders, each of which could adversely affect our operating results. If a significant transaction involving any of our key customers resultsexperience seasonal declines in the loss of or reduction in purchases by these key customers, it could have a materially adverse effect on our business, results of operations and financial condition.

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We are dependent on sales to distributors and retailers, which may increase price erosion and the volatility of our sales.

A substantial portion of our sales has been to distributors of disk drive products. Certain of our distributors may also market other products that compete with our products. Product qualification programs in this distribution channel are limited, which increases the number of competing products that are available to satisfy demand, particularly in times of lengthening product cycles. As a result, purchasing decisions in this channel are based largely on price, terms and product availability. Sales volumes through this channel are also less predictable and subject to greater volatility than sales to our OEM customers. In addition, deterioration in business and economic conditions could exacerbate price erosion and volatility as distributors lower prices to compensate for lower demand and higher inventory levels. Our distributors’ ability to access credit for purposes of funding their operations may also affect purchases of our products by these customers. If distributors reduce their purchases of our products or prices decline significantly in this distribution channel or if distributors experience financial difficulties or terminate their relationships with us, our revenues and results of operations would be adversely affected.

In addition, retail sales of our consumer products during the second half of our fiscal year which may adversely affect our results of operations.

In certain end markets, sales of computers, storage subsystems and consumer electronic devices tend to be seasonal, and therefore, we expect to continue to experience seasonality in our business as we respond to variations in our customers’ demand for our products. In particular, we anticipate that sales of our consumer products will continue to be lower during the second half of our fiscal year. Retail sales of certain of our legacy markets solutions traditionally experience seasonal variability in demand with higher levels of demand in the first half of our fiscal year driven by consumer spending in theback-to-school season from late summer to fall and the traditional holiday shopping season from fall to winter. Our ability to reach such consumers depends on us maintaining effectiveWe experience seasonal reductions in the second half of our fiscal year in the business activities of our customers during international holidays like Lunar New Year, as well as in the summer months (particularly in Europe), which typically result in lower sales during those periods. Since our working relationships with major retailers and distributors.capital needs peak during periods in which we are increasing production in anticipation of orders that have not yet been received, our results of operations will fluctuate even if the forecasted demand for our products proves accurate. Failure to anticipate consumer demand for our branded solutions as well as an inability to maintain effective working relationships with retail and online distributors may also adversely impact our future results of operations.

operations. Furthermore, it is difficult for us to evaluate the degree to which this seasonality may affect our business in future periods because of the rate and unpredictability of product transitions and new product introductions, as well as macroeconomic conditions.

We may not be successful in our efforts to grow our systems, SSD and Lyve revenues.
We have made and continue to make investments to grow our systems, SSD and Lyve platform revenues. Our internationalability to grow systems, SSD and Lyve revenues is subject to the following risks:
•we may be unable to accurately estimate and predict data center capacity and requirements;
•we may not be able to offer compelling solutions or services to enterprises, subscribers, or consumers;
•we may be unable to obtain cost effective supply of NAND flash memory in order to offer competitive SSD solutions; and
•our cloud systems revenues generally have a longer sales cycle, and manufacturinggrowth is likely to depend on relatively large customer orders, which may increase the variability of our results of operations and the difficulty of matching revenues with expenses.
Our results of operations and share price may be adversely affected if we are not successful in our efforts to grow our revenues as anticipated. In addition, our growth in these markets may bring us into closer competition with some of our customers or potential customers, which may decrease their willingness to do business with us.
Our worldwide sales operations subject us to risks that may adversely affect our business related to disruptions in foreigninternational markets, currency exchange fluctuations, longer payment cycles, potential adverse tax consequences, increased costs, our customers’ credit and access to capital, health-related risks, investment risks, tariffs, privacyglobal health outbreaks.
We are a global company and protection of data and access to personnel.

We have significant sales and manufacturing operations in foreign countries,outside of the United States, including manufacturing facilities, sales personnel and customer support operations. We have manufacturing facilities in China, Malaysia, Northern Ireland, Singapore and Thailand, in addition to those in the United States. Additionally, the manufacturing of somealso generate a significant portion of our products is concentrated in certain geographical locations. The production of certain drive subassemblies are limited to Thailand andrevenue from sales outside the production of media is limited to Singapore.U.S. Disruptions in the economic, environmental, political, legal or regulatory landscape in thesethe countries where we operate may have a material adverse impact on our manufacturing and sales operations.

Our international operations Disruptions in financial markets, the deterioration of global economic conditions, and geopolitical uncertainty and instability or war, such as the military action against Ukraine launched by Russia, have had and may continue to have an impact on our sales to customers and end-users located in the EMEA region.

Prices for our products are subjectdenominated predominantly in dollars, even when sold to economic risks inherent in doing business in foreign countries, includingcustomers that are located outside the following:

•

Disruptions in Foreign Markets.Disruptions in financial markets and the deterioration of the underlying economic conditions in the past in some countries, including those in Asia, United Kingdom and the European Union have had an impact on our sales to customers located in, or whoseend-user customers are located in, these countries.

•

Fluctuations in Currency Exchange Rates.Prices for our products are denominated predominantly in U.S. dollars, even when sold to customers that are located outside the United States. An increase in the value of the dollar could increase the real cost to our customers of our products in those markets outside of the U.S. where we sell in dollars. This could adversely impact our sales and market share in such areas or increase pressure on us to lower our price, and adversely impact our profit margins. In addition, we have revenue and expenses denominated in currencies other than the dollar, primarily the Thai Baht, Singaporean dollar, Chinese Renminbi and British Pound Sterling, which further exposes us to adverse movements in foreign currency exchange rates. A weakened dollar could increase the effective cost of our expenses such as payroll, utilities, tax and marketing expenses, as well as overseas capital expenditures. Any of these events could have a material adverse effect on our results of operations. We may attempt to manage the impact of foreign currency exchange rate changes by, among other things, entering into foreign currency forward exchange contracts which could be designated as cash flow hedges or not designated as hedging instruments. In addition, our hedges may be ineffective, may expire and not be renewed or may not offset any or more than a portion of the adverse financial impact resulting from currency variations. The hedging activities may not cover our full exposure, subject us to certain counterparty credit risks and may impact our results of operations. See “Item 7A. Quantitative and Qualitative Disclosures About Market Risk—Foreign Currency Exchange Risk” of this report for additional information about our foreign currency exchange risk.

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•

Longer Payment Cycles.Our customers outside of the United States are sometimes allowed longer time periods for payment than our U.S. customers. This increases the risk of nonpayment due to the possibility that the financial condition of particular customers may worsen during the course of the payment period.

•

Potential Adverse Tax Consequences.Our international operations create a risk of potential adverse tax consequences, including imposition of withholding or other taxes on payments by our subsidiaries. In addition, our taxable income in any jurisdiction is dependent upon acceptance of our operational practices and intercompany transfer pricing by local tax authorities as being on an arm’s length basis. Due to inconsistencies in application of the arm’s length standard among taxing authorities, as well as a lack of adequate treaty-based protection, transfer pricing challenges by tax authorities could, if successful, substantially increase our income tax expense. We are subject to tax audits around the world, and are under audit in various jurisdictions, and such jurisdictions may assess additional income tax against us. Although we believe our tax positions are reasonable, the final determination of tax audits could be materially different from our recorded income tax provisions and accruals. The ultimate results of an audit could have a material adverse effect on our operating results or cash flows in the period or periods for which that determination is made and could result in increases to our overall tax expense in subsequent periods. In light of the ongoing fiscal challenges many countries are facing, various levels of government are increasingly focused on tax reform and other legislative action to increase tax revenue. In addition, the Organization for Economic Cooperation and Development’s Base Erosion and Profit Shifting recommendations are reshaping international tax rules in numerous countries. These actual and potential changes in the relevant tax laws applicable to corporate multinationals along with potential changes in accounting and other laws, regulations, administrative practices, principles and interpretations could increase the risk of double taxation, cause increased tax audit activity, and could impact our effective tax rate.

•

Increased Costs.The shipping and transportation costs associated with our international operations are typically higher than those associated with our U.S. operations, resulting in decreased operating margins in some foreign countries. Volatility in fuel costs, political instability or constrained in air transportation may lead us to develop alternative shipment methods, which could disrupt our ability to receive raw materials in, or ship finished product from and as a result our business and operating results may be harmed.

•

Credit and Access to Capital Risks.Our international customers could have reduced access to working capital due to higher interest rates, reduced bank lending resulting from contractions in the money supply or the deterioration in the customer’s or its bank’s financial condition or the inability to access other financing.

•

Global Health Outbreaks.The occurrence of a pandemic disease may adversely impact our operations and some of our key customers. Such diseases could also potentially disrupt the timeliness and reliability of the distribution network we rely on.

•

Privacy and Protection of Data. Our business is subject to a number of laws, rules and regulations in the countries where we operate pertaining to the collection, processing, security, use, retention and transfer information about our customers, consumers and employees. For example, the General Data Protection Regulation, which is in effect in the European Union (“EU”), applies to our operations. In the U.S., numerous federal and state laws, rules and regulations apply to our data handling practices. For example, California recently enacted legislation, the California Consumer Privacy Act (“CCPA”) which will, among other things, require new disclosures to California consumers and afford such consumers new abilities toopt-out of certain sales of personal information when it goes into effect on January 1, 2020. The CCPA was amended in September 2018, and it is unclear whether this legislation will be modified again or how it will be interpreted. The effects of this legislation potentially are wide-ranging and may require us to modify our data processing practices and policies and incur substantial compliance-related costs and expenses. Additionally, other states in the U.S. have proposed or enacted similar laws and regulations relating to privacy and data protection. Laws, rules and regulations relating to privacy and data protection evolve frequently and their scope may continually change, through new legislation, amendments to existing legislation and changes in enforcement, and may be inconsistent from one jurisdiction to another. Compliance with various laws, rules and regulations relating to privacy and data protection may require us to change our data practices, which could result in increased costs, require significant changes to our business and operations and otherwise have an adverse effect on our business and results of operations. Violations of privacy or data protection laws could result in adverse effects on our business and results of operations including damage to our brand and reputation, significant financial penalties and liability, governmental investigations and proceedings, and unanticipated changes to our data handling and processing practices.

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•

Access to Personnel.There is substantial competition for qualified and capable personnel in certain jurisdictions in which we operate, including the U.S., Thailand, China and Singapore, which may make it difficult for us to recruit and retain qualified employees in sufficient numbers. The reductions in workforce that result from our historical restructurings have made and may continue to make it difficult for us to recruit and retain personnel. Increased difficulty in recruiting or retaining sufficient and adequate personnel in our international operations may lead to increased manufacturing and employment compensation costs, which could adversely affect our results of operations.

Our business is subject to various laws, regulations and governmental policies that may cause us to incur significant expense.

Our business is subject to regulation under a wide variety of U.S. federal and state andnon-U.S. laws, regulations and policies. There can be no assurance that laws, regulations and policies will not be changed in ways that will require us to modify our business model and objectives or affect our returns on investments by restricting existing activities and products, subjecting them to escalating costs or prohibiting them outright. In particular, legislative, regulatory or other areas of significance for our businesses that U.S. andnon-U.S. governments have focused and continue to focus on include antitrust and competition law, improper payments, data privacy and sovereignty, currency exchange controls that could restrict the movement of liquidity from particular jurisdictions, trade controls or tariffs on imports and exports in the U.S. or other countries, complex economic sanctions and the enactment of U.S. tax reform and potential further changes to tax laws may have an effect on our corporate structure, operations, sales, liquidity, capital requirements, effective tax rate and performance. In China, Malaysia, Northern Ireland, Singapore and Thailand, in which we have significant operating assets, and the European Union have exercised and continue to exercise significant influence over many aspects of their domestic economies including, but not limited to, fair competition, tax practices, anti-corruption, anti-trust, price controls and international trade.

In addition, regulation or government scrutiny may impact the requirements for marketing our products and slow our ability to introduce new products, resulting in an adverse impact on our business. Although we have implemented policies and procedures designed to ensure compliance, there can be no assurance that our employees, contractors or agents will not violate these or other applicable laws, rules and regulations to which we may be subject. Violations of these laws and regulations could lead to significant penalties, restraints on our export or import privileges, monetary fines, government investigations, disruption of our operating activities, damage to our reputation and corporate brand, criminal proceedings and regulatory or other actions that could materially adversely affect our results of operations. The political and media scrutiny surrounding a governmental investigation for the violation of such laws, even if an investigation does not result in a finding of violation, could cause us significant expense and collateral consequences, including reputational harm, that could have an adverse impact on our business, operating results and financial condition.

Changes in U.S. trade policy, including the imposition of tariffs and the resulting consequences, may have a material adverse impact on our business and results of operations.

The U.S. government has adopted a new approach to trade policy including in some cases to renegotiate, or potentially terminate, certain existing bilateral or multi-lateral trade agreements. The U.S. government has also imposed tariffs on certain foreign goods, including information and communication technology products. These measures may materially increase costs for goods imported into the United States. This in turn could require us to materially increase prices to our customers which may reduce demand, or, if we are unable to increase prices to adequately address any tariffs, quotas or duties result in lowering our margin on products sold. Changes in U.S. trade policy have resulted in, and could result in more, U.S. trading partners adopting responsive trade policies, including imposition of increased tariffs, quotas or duties, making it more difficult or costly for us to export our products to those countries. The implementation of a border tax, tariff or higher customs duties on our products manufactured abroad or components that we import into the U.S., or any potential corresponding actions by other countries in which we do business, could negatively impact our financial performance.

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We could suffer a loss of revenue and increased costs, exposure to significant liability including legal and regulatory consequences, reputational harm and other serious negative consequences if we encounter cyber-attacks, ransomware or other cyber security breaches that disrupt our operations or result in the dissemination of proprietary or confidential information about us or our customers or other third parties.

Our operations are dependent upon our ability to protect our computer equipment and the electronic data stored in our databases. We manage and store various proprietary information and sensitive or confidential data relating to our operations. As our operations become more automated and increasingly interdependent, our exposure to the risks posed by storage and maintenance of data will increase. The measures we have implemented to secure our computer equipment and electronic data may be vulnerable to employee error, hacking, malfeasance, system error or other irregularities and may not be sufficient for all eventualities. The insurance coverage we maintain that is intended to address certain data security risks, may be insufficient to cover all types of claims or losses that may arise. We have been, and will likely continue to be, subject to computer viruses or other malicious codes, cyber-attacks or other computer-related attempts to breach the information technology (“IT”) systems we use for these purposes. We may also be subject to IT system failures and network disruptions due to these factors. Experienced computer programmers and hackers may be able to penetrate our network security, misappropriate or compromise our confidential information or that of third-parties, create system disruptions or cause shutdowns. Computer programmers and hackers also may be able to develop and deploy viruses, worms and other malicious software programs that attack our products or otherwise exploit any security vulnerabilities of our products. Such attempts are increasing in technical sophistication, number and ability to evade detection or to obscure such activities. Although we take steps to protect against and detect such attempts, our efforts may not be sufficient for all eventualities. In addition, sophisticated hardware and operating system software and applications that we produce or procure from third-parties may contain defects in design or manufacture, including “bugs” and other problems that could unexpectedly interfere with the operation of the system.

The costs to us to eliminate or address the foregoing security problems and security vulnerabilities before or after a cyber-incident could be significant. System redundancy may be ineffective or inadequate, and our disaster recovery planning may not be sufficient for all eventualities. Our remediation efforts may not be successful and could result in interruptions, delays or cessation of service, and loss of existing or potential customers that may impede our sales, manufacturing, distribution or other critical functions. We could lose existing or potential customers for outsourcing services or other IT solutions in connection with any actual or perceived security vulnerabilities in our products. Some of our products contain encryption and other measures to protect third-party content stored on our products. Such measures may be compromised, breached or circumvented by sophisticated attackers and losses or unauthorized access to or releases of confidential information may occur. Breaches of our security measures and the unapproved dissemination of proprietary information or sensitive or confidential data about us or our customers or other third-parties, could expose us, our vendors and customers or other third-parties affected to a risk of loss or misuse of this information, result in litigation or governmental investigations and potential liability for us, damage our brand and reputation or otherwise harm our business. Failure to meet our contractual obligations to promote information security with certain customers may result in liability, including additional costs, indemnification claims, litigation and damage to our brand and reputation. In addition, we rely in certain limited capacities on third-party data management providers whose possible security problems and security vulnerabilities may have similar effects on us. Our business, brand and reputation could also be adversely affected by media or other reports of perceived security vulnerabilities in our products, network or processes, even if unsubstantiated.

We are subject to laws, rules and regulations in the U.S., U.K., EU and other countries relating to the collection, use, and security of user data. In many cases, these laws apply not only to third-party transactions, but also to transfers of information between us and our subsidiaries, and among us, our subsidiaries and other parties with which we have commercial relations. Our ability to execute transactions and to possess and use personal information and data in conducting our business subjects us to legislative and regulatory burdens that may require us to notify vendors, customers or employees of a data security breach. We have incurred, and will continue to incur, significant expenses to comply with mandatory privacy and security standards and protocols imposed by law, regulation, industry standards, or contractual obligations. These laws, protocols and standards continue to develop and may be inconsistent from jurisdiction to jurisdiction. Complying with emerging and changing international requirements may cause us to incur substantial costs or require us to change our business practices. If we fail to comply with applicable federal, state or international privacy-related or data protection laws we may be subject to proceedings by governmental entities and incur penalties, significant legal liability or reputational harm.

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We must successfully maintain and upgrade our IT systems, and our failure to do so could have a material adverse effect on our business,results of operations. We have attempted to manage the impact of foreign currency exchange rate changes by, among other things, entering into foreign currency forward exchange contracts from time to time, which could be designated as cash flow hedges or not designated as hedging instruments. Our hedging strategy may be ineffective, and specific hedges may expire and not be renewed or may not offset any or more than a portion of the adverse financial conditionimpact resulting from currency variations. The hedging activities may not cover our full exposure, subject us to certain counterparty credit risks and may impact our results of operations. See “Item 7A. Quantitative and Qualitative Disclosures About Market Risk— Foreign Currency Exchange Risk” of this report for additional information about our foreign currency exchange risk.

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The shipping and transportation costs associated with our international operations are typically higher than those associated with our U.S. operations, resulting in decreased operating margins in some countries. Volatility in fuel costs, political instability or constraints in or increases in the costs of air transportation may lead us to develop alternative shipment methods, which could disrupt our ability to receive raw materials, or ship finished product, and as a result our business and results of operations.

From time to time, we expand may be harmed.

The occurrence of a pandemic disease, such as the recent COVID-19 pandemic, has impacted and improvemay adversely impact our IT systems to supportoperations (including, without limitation, logistical and other operational costs) and the operations of some of our customers.
The ongoing COVID-19 pandemic has impacted our business, going forward. Consequently,operating results and financial condition, as well as the operations and financial performance of many of the customers and suppliers in industries that we serve. We are inunable to predict the process of implementing,extent to which the pandemic and related effects will continue to invest in and implement, modifications and upgrades to our IT systems and procedures, including making changes to legacy systems or acquiring new systems with new functionality, and building new policies, procedures, training programs and monitoring tools. These types of activities subject us to inherent costs and risks associated with changing and acquiring these systems, including capital expenditures, additional operating expenses, demands on management time and other risks and costs of delays or difficulties in transitioning to or integrating new systems into our current systems. These implementations, modifications and upgrades may not result in productivity improvements at a level that outweighs the costs of implementation, or at all. In addition, difficulties with implementing new technology systems, delays in our timeline for planned improvements, significant system failures or our inability to successfully modify our IT systems to respond to changes in our business needs may cause disruptions inadversely impact our business operations, financial performance, results of operations, financial position and the achievement of our strategic objectives.
The COVID-19 pandemic has resulted in a widespread health crisis and numerous disease control measures being taken to limit its spread. The impact of the pandemic on our business has included or could in the future include:
•disruptions to or restrictions on our ability to ensure the continuous manufacture and supply of our products and services, including insufficiency of our existing inventory levels and temporary or permanent closures or reductions in operational capacity of our facilities or the facilities of our direct or indirect suppliers or customers, and any supply chain disruptions;
•temporary shortages of skilled employees available to staff manufacturing facilities due to stay at home orders and travel restrictions within as well as into and out of countries;
•increases in operational expenses and other costs related to requirements implemented to mitigate the impact of the COVID-19 pandemic;
•delays or limitations on the ability of our customers to perform or make timely payments;
•reductions in short- and long-term demand for our products, or other disruptions in technology buying patterns;
•adverse effects on economies and financial markets globally or in various markets throughout the world, potentially leading to a prolonged economic downturn or reductions in business and consumer spending, which may result in decreased net revenue, gross margins, or earnings and/or in increased expenses and difficulty in managing inventory levels;
•delays to and/or lengthening of our sales or development cycles or qualification activity;
•challenges for us, our direct and indirect suppliers and our customers in obtaining financing due to turmoil in financial markets;
•workforce disruptions due to illness, quarantines, governmental actions, other restrictions, and/or the social distancing measures we have a material adverse effecttaken to mitigate the impact of the COVID-19 pandemic in an effort to protect the health and well-being of our employees, customers, suppliers and of the communities in which we operate;
•increased vulnerability to cyberattacks due to the significant number of employees working remotely; and
•our management team continuing to commit significant time, attention and resources to monitoring the COVID-19 pandemic and seeking to mitigate its effects on our business and workforce.
The COVID-19 pandemic has increased economic and demand uncertainty. It continues to affect our business in both positive and negative ways, and there is uncertainty around its duration and impact. The ultimate extent of the impact of the COVID-19 pandemic on our business, financial condition and results of operations.

operations will depend on future developments, including the impact of any virus mutations or new strains of COVID-19 virus and the distribution and efficacy of the vaccine, which are highly uncertain and cannot be predicted at this time. These impacts, individually or in the aggregate, could have a material and adverse effect on our business, results of operations and financial condition. Such effect may be exacerbated in the event the pandemic and the measures taken in response to it, and their effects, persist for an extended period of time, or if there is a resurgence of the outbreak or variants thereof. Under any of these circumstances, the resumption of normal business operations may be delayed or hampered by lingering effects of the COVID-19 pandemic on our operations, direct and indirect suppliers, partners, and customers. The COVID-19 pandemic may also heighten other risks described in this Risk Factors section.

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If we experience shortagesdo not control our costs, we will not be able to compete effectively.
We continually seek to make our cost structure and business processes more efficient. We are focused on increasing workforce flexibility and scalability, and improving overall competitiveness by leveraging our global capabilities, as well as external talent and skills, worldwide. Our strategy involves, to a substantial degree, increasing revenue and exabytes volume while at the same time controlling expenses. Because our vertical design and manufacturing strategy, our operations have higher costs that are fixed or difficult to reduce in the short-term, including our costs related to utilization of existing facilities and equipment. If we fail to forecast demand accurately or if there is a partial or complete reduction in long-term demand for our products, we could be required to write off inventory, record excess capacity charges which could negatively impact our gross margin and our financial results. If we do not control our manufacturing and operating expenses, our ability to compete in the marketplace may be impaired. In the past, activities to reduce costs have included closures and transfers of facilities, significant personnel reductions, restructuring efforts and efforts to increase automation. Our restructuring efforts may not yield the intended benefits and may be unsuccessful or disruptive to our business operations which may materially adversely affect our financial results.
RISKS ASSOCIATED WITH SUPPLY AND MANUFACTURING
Shortages or delays in the receipt of, or cost increases in, critical components, equipment or raw materials necessary to manufacture our products, we may cause us to suffer lower operating margins, production delays and other material adverse effects.

effects.

The cost, quality, availability and supply of components, subassemblies, certain equipment and raw materials used to manufacture our products and key components like recording media and heads are critical to our success. TheParticularly important for our products are components such as read/write heads, substrates for recording media, ASICs, spindle motors, printed circuit boards, suspension assemblies and NAND flash memory. In addition, the equipment we use to manufacture our products and components is frequently custom made and comes from a few suppliers and the lead times required to obtain manufacturing equipment can be significant. Particularly importantOur efforts to control our costs, including capital expenditures, may also affect our ability to obtain or maintain such inputs and equipment, which could affect our ability to meet future demand for our products are components such as read/write heads, substrates for recording media, ASICs, spindle motors, printed circuit boards, suspension assemblies and NAND flash memory.

products.

We rely on sole suppliers or a limited number of direct and indirect suppliers for some or all of these components that we do not manufacture, including substrates for recording media, read/write heads, ASICs, spindle motors, printed circuit boards, suspension assemblies and NAND flash memory. ManyIn light of this small, consolidated supplier base, if our suppliers increased their prices as a result of inflationary pressures from the current macroeconomic conditions or other changes in economic conditions, our results of operations would be negatively affected. Also, many of such direct and indirect component suppliers are geographically concentrated, which makesmaking our supply chain more vulnerable to regional disruptions such as severe weather, the occurrence of local or global health issues or pandemics, acts of terrorism, war and an unpredictable geopolitical climate, which may have a material impact on the production, availability and availabilitytransportation of many components. We have experienced and continue to experience disruptions in our supply chain due to the impact of the COVID-19 pandemic, which has also impacted and may adversely impact our operations (including, without limitation, logistical and other operational costs) and the operations of some of our key direct and indirect suppliers. If our direct and indirect vendors for these components are unable to meet our cost, quality, supply and supplytransportation requirements, continue to remain financially viable or fulfill their contractual commitments and obligations, we could experience a shortagedisruption in our supply chain, including shortages in supply or an increaseincreases in production costs, which would materially adversely affect our results of operations.

The current worldwide shortage of semiconductors exacerbates these risks.

Certain rare earth elements are critical in the manufacture of our products. We purchase components that contain rare earth elements from a number of countries, including China. We cannot predict whether any nation will impose regulations or trade barriers including tariffs, duties, quotas or embargoes upon the rare earth elements incorporated into our products that would restrict the worldwide supply of such metals or increase their cost. We have experienced and continuing to experience increased costs and production delays when we were unable to obtain the necessary equipment or sufficient quantities of some components, and/or have been forced to pay higher prices or make volume purchase commitments or advance deposits for some components, equipment or raw materials that were in short supply in the industry in general. Further, if our customers experience shortages of components or materials used in their products it could result in a decrease in demand for our products and have an adverse effect on our results of operations. If any major supplier were to restrict the supply available to us or increase the cost of the rare earth elements used in our products, we could experience a shortage in supply or an increase in production costs, which would adversely affect our results of operations.

From time to time, we may be subject to litigation, government investigations

Shortages or governmental proceedings, which may adversely impact our results of operations and financial condition.

From time to time, we may be involveddelays in various legal, regulatory or administrative investigations, negotiations or proceedings arising in the normal course of business. In the event of litigation, government investigations or governmental proceedings, we are subject to the inherent risks and uncertainties that may result if outcomes differ from our expectations. In the event of adverse outcomes in any litigation, investigation or government proceeding, we could be required to pay substantial damages, fines or penalties and cease certain practices or activities, which could materially harm our business.

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The costs associated with litigation and government investigations can also be unpredictable depending on the complexity and length of time devoted to such litigation or investigation. Litigation, investigations or government proceedings may also divert the efforts and attention of our key personnel, which could also harm our business.

If we do not control our fixed costs, we will not be able to compete effectively in our industry.

We continually seek to make our cost structure and business processes more efficient. We are focused on increasing workforce flexibility and scalability, and improving overall competitiveness by leveraging our global capabilities,critical components, as well as external talentreliance on single-source suppliers, can affect our production and skills, worldwide. Our strategy involves, to a substantial degree, increasing revenuedevelopment of products and exabytes volume while at the same time controlling operating expenses. If we do not controlmay harm our operating expenses, our ability to compete in the marketplace may be impaired. In the past, activities to reduce operating costs have included closures and transfersresults.

We are dependent on a limited number of facilities, significant personnel reductions, restructuring efforts and efforts to increase automation. Our restructuring efforts may not yield the intended benefits and may be unsuccessfulqualified suppliers who provide critical materials or disruptive to our business operations which may materially adversely affect our financial results.

Consolidation among component manufacturers has resulted and may continue to result in some component manufacturers exiting the industry or not making sufficient investments to develop new components.

components. If there is a shortage of, or delay in supplying us with, critical components, equipment or raw materials, then:

then:

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•it is likely that our suppliers would raise their prices and, if we could not pass these price increases to our customers, our operating margin would decline;

•we may have to reengineer some products, which would likely cause production and shipment delays, make the reengineered products more costly and provide us with a lower rate of return on these products;

•we would likely have to allocate the components we receive to certain of our products and ship less of others, which could reduce our revenues and could cause us to lose sales to customers who could purchase more of their required products from manufacturers that either did not experience these shortages or delays or that made different allocations; and

•we may be late in shipping products, causing potential customers to make purchases from our competitors, thus causing our revenue and operating margin to decline.

We cannot assure you that we will be able to obtain critical components in a timely and economic manner. ManyThe industry is currently experiencing a global shortage of semiconductors and other electronic components. In addition, many of our suppliers’ manufacturing facilities are fully utilized. If they fail to invest in additional capacity or deliver components in the required timeframe, such failure would have an impact on our ability to ramp new products, and may result in a loss of revenue or market share if our competitors did not utilize the same components and were not affected.

affected.

We often aim to lead the market in new technology deployments and leverage unique and customized technology from single source suppliers who are early adopters in the emerging market. Our options in supplier selection in these cases are limited and the supplier based technology has been and may consequentlycontinue to be single sourced until wider adoption of the technology occurs and any necessary licenses become available. In such cases, any technical issues in the supplier’s technology may cause us to delay shipments of our new technology deployments and harm our financial position.

position.

If revenues fall or customer demand decreases significantly, we may not meet all of our purchase commitments to certain suppliers.

From time to time, we enter into long-term,non-cancelable purchase commitments or make largeup-front investments with certain suppliers in order to secure certain components or technologies for the production of our products or to supplement our internal manufacturing capacity for certain components. If our actual revenues in the future are lower than our projections or if customer demand decreases significantly below our projections, we may not meet all of our purchase commitments with these suppliers. As a result, it is possible that our revenues will not be sufficient to recoup ourup-front investments, in which case we will have to shift output from our internal manufacturing facilities to these suppliers or make penalty-type payments under the terms of these contracts. Additionally, because our markets are volatile, competitive and subject to rapid technology and price changes, we face inventory and other asset risks in the event we do not fully utilize firm purchase commitments.

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The loss of key executive officers If we are unable to fully utilize our purchase commitments or if we shift output from our internal manufacturing facilities in order to meet the commitments, our gross margin and employeesoperating margin could negatively impact our business prospects.

Our future performance depends to a significant degree upon the continued service of key members of management as well as marketing, sales and product development personnel. The loss of one or more of our key personnel may have a material adverse effect on our business, results of operations and financial condition. We believe our future success will also depend in large part upon our ability to attract, retain and further motivate highly skilled management, marketing, sales and product development personnel. We have experienced intense competition for personnel, and we cannot assure you that we will be able to retain our key employees or that we will be successful in attracting, assimilating and retaining personnel in the future.

materially adversely impacted.

Due to the complexity of our products, some defects may only become detectable after deployment.

Our products are highly complex and are designed to operate in and form part of larger complex networks and storage systems. Our products may contain a defect or be perceived as containing a defect by our customers as a result of improper use or maintenance. Lead times required to manufacture certain components are significant, and a quality excursion may take significant time and resources to remediate. Defects in our products, third-party components or in the networks and systems of which they form a part, directly or indirectly, have resulted in and may in the future result in:

in:

•increased costs and product delays until complex solution level interoperability issues are resolved;

•costs associated with the remediation of any problems attributable to our products;

•loss of or delays in revenues;

•loss of customers;

•failure to achieve market acceptance and loss of market share;

•increased service and warranty costs; and

•increased insurance costs.

Defects in our products could also result in legal actions by our customers for breach of warranty, property damage, injury or death. Such legal actions, including but not limited to product liability claims could exceed the level of insurance coverage that we have obtained. Any significant uninsured claims could significantly harm our financial condition.

condition.

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RISKS RELATED TO HUMAN CAPITAL
The loss of or inability to attract, retain and motivate key executive officers and employees could negatively impact our business prospects.
Our future performance depends to a significant degree upon the continued service of key members of management as well as marketing, sales and product development personnel. We may pursue strategic alliances, acquisitions, joint venturesbelieve our future success will also depend in large part upon our ability to attract, retain and investment opportunities that involve risks that could adversely affect our results of operations.

From time to time, we pursue strategic alliances, acquisitions, joint venturesfurther motivate highly skilled management, marketing, sales and investments in other companies that are complementary to our business. There is substantialproduct development personnel. We have experienced intense competition for attractive strategic alliance, acquisition, joint venturequalified and investment candidates. Therefore,capable personnel, including in the U.S., Thailand, China, Singapore and Northern Ireland, and we may not be able to identify suitable strategic alliances, acquisition, joint venture, or investment candidates. Even if we can identify them, the terms on which we are able to consummate a transaction may not be commercially reasonable for us to pursue. We cannot assure you that we will be able to partnerretain our key employees or that we will be successful in attracting, assimilating and retaining personnel in the future. Additionally, because a portion of our key personnel’s compensation is contingent upon the performance of our business, including through cash bonuses and equity compensation, when the market price of our ordinary shares fluctuates or our results of operations or financial condition are negatively impacted, we may be at a competitive disadvantage for retaining and hiring employees. The reductions in workforce that result from our historical restructurings have also made and may continue to make it difficult for us to recruit and retain personnel. Increased difficulty in accessing, recruiting or retaining personnel may lead to increased manufacturing and employment compensation costs, which could adversely affect our results of operations. The loss of one or more of our key personnel or the inability to hire and retain key personnel could have a material adverse effect on our business, results of operations and financial condition.

We are subject to risks related to corporate and social responsibility and reputation.
Many factors influence our reputation including the perception held by our customers, suppliers, partners, shareholders, other key stakeholders, and the communities in which we operate. We face increasing scrutiny related to environmental, social and governance activities. We risk damage to our reputation if we fail to act responsibly in a number of areas, such as diversity and inclusion, environmental stewardship, sustainability, supply chain management, climate change, workplace conduct, and human rights. Any harm to our reputation could impact employee engagement and retention, our corporate culture, and the willingness of customers, suppliers, and partners to do business with acquireus, which could have a material adverse effect on our business, results of operations and cash flows. Further, despite our policies to the contrary, we may not be able to control the conduct of every individual actor, and our employees and personnel may violate environmental, social or investgovernance standards or engage in suitable candidates,other unethical conduct. These acts, or integrate acquired technologiesany accusation of such conduct, even if proven to be false, could adversely impact the reputation of our business.
RISKS RELATED TO FINANCIAL PERFORMANCE OR GENERAL ECONOMIC CONDITIONS
We may not be able to generate sufficient cash flows from operations and our investments to meet our liquidity requirements, including servicing our indebtedness.
Our business may not generate sufficient cash flows to enable us to meet our liquidity requirements, including working capital, capital expenditures, product development efforts, investments, servicing our indebtedness and other general corporate requirements. If we cannot fund our liquidity requirements, we may have to reduce or operations successfully intodelay capital expenditures, product development efforts, investments and other general corporate expenditures. We cannot assure you that any of these remedies would, if necessary, be effected on commercially reasonable terms, or at all, or that they would permit us to meet our existing technologiesobligations, which would affect our results of operations.
We are leveraged and operations. Moreover,require significant amounts of cash to service our debt. Our debt and debt service requirements could adversely affect our ability to financeoperate our business and may limit our ability to take advantage of potential business opportunities and reduce our options for capital allocation. Our high level of debt presents the following risks:
•we are required to use a substantial portion of our cash flow from operations to pay principal and interest on our debt, thereby reducing the availability of our cash flow to fund working capital, capital expenditures, product development efforts, strategic acquisitions, investments and alliances and other general corporate requirements;
•our substantial leverage increases our vulnerability to economic downturns, decreased availability of capital, and adverse competitive and industry conditions and could place us at a competitive disadvantage compared to those of our competitors that are less leveraged;
•our debt service obligations could limit our flexibility in planning for, or reacting to, changes in our business and our industry, and could limit our ability to pursue other business opportunities, borrow more money for operations or capital in the future and implement our business strategies;
•our level of debt may restrict us from raising, or make it more costly to raise, additional financing on satisfactory terms to fund working capital, capital expenditures, product development efforts, strategic acquisitions, joint venturesinvestments and alliances and other general corporate requirements; and
•covenants in our debt instruments limit our ability to pay future dividends or investmentsmake other restricted payments and investments.
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In addition, in the event that we need to refinance all or a portion of our outstanding debt as it matures or incur additional debt to fund our operations, we may not be able to obtain terms as favorable as the terms of our existing debt or refinance our existing debt or incur additional debt to fund our operations at all. If prevailing interest rates or other factors result in higher interest rates upon refinancing, then the interest expense relating to the refinanced debt would increase. Furthermore, if any rating agency changes our credit rating or outlook, our debt and equity securities could be negatively affected, which could adversely affect our ability to refinance existing debt or raise additional capital.
We are subject to counterparty default risks.
We have numerous arrangements with financial institutions that subject us to counterparty default risks, including cash and investment deposits, and foreign currency forward exchange contracts and other derivative instruments. As a result, we are subject to the risk that the counterparty to one or more of these arrangements will, voluntarily or involuntarily, default on its performance obligations. In times of market distress in particular, a counterparty may not comply with its contractual commitments that could then lead to it defaulting on its obligations with little or no notice to us, thereby limiting our ability to take action to lessen or cover our exposure. Additionally, our ability to mitigate our counterparty exposures could be limited by the terms of the relevant agreements or because market conditions prevent us from taking effective action. If one of our counterparties becomes insolvent or files for bankruptcy, our ability to recover any losses suffered as a result of that counterparty's default may be limited by the liquidity of the counterparty or the applicable laws governing the bankruptcy proceedings. In the event of any such counterparty default, we could incur significant losses, which could have a material adverse effect on our leverage level, the covenants containedbusiness, results of operations, or financial condition.
Further, our customers could have reduced access to working capital due to global economic conditions, higher interest rates, reduced bank lending resulting from contractions in the instrumentsmoney supply or the deterioration in the customer’s, or their bank’s financial condition or the inability to access other financing, which would increase our credit and non-payment risk, and could result in an increase in our operating costs or a reduction in our revenue. Also, our customers outside of the United States are sometimes allowed longer time periods for payment than our U.S. customers. This increases the risk of nonpayment due to the possibility that govern our outstanding indebtedness, and any agreements governing any other debt wethe financial condition of particular customers may incur.worsen during the course of the payment period. In addition, some of our cash reservesOEM customers have adopted a subcontractor model that requires us to contract directly with companies, such as original design manufacturers, that provide manufacturing and fulfillment services to our OEM customers. Because these subcontractors are generally not as well capitalized as our direct OEM customers, this subcontractor model exposes us to increased credit risks. Our agreements with our OEM customers may not permit us to increase our product prices to alleviate this increased credit risk.
Our quarterly results of operations fluctuate, sometimes significantly, from period to period, and may cause our share price to decline.
Our quarterly revenue and results of operations fluctuate, sometimes significantly, from period to period. These fluctuations, which we expect to continue, have been and may continue to be precipitated by a variety of factors, including:
•uncertainty in global economic and political conditions, and instability or war (such as the military action against Ukraine launched by Russia) or adverse changes in the level of economic activity in the major regions in which we do business;
•pandemics, such as COVID-19, or other global health issues that impact our operations as well as those of our customers and suppliers;
•competitive pressures resulting in lower prices by our competitors which may shift demand away from our products;
•announcements of new products, services or technological innovations by us or our competitors, and delays or problems in our introduction of new, more cost-effective products, the inability to achieve high production yields or delays in customer qualification or initial product quality issues;
•changes in customer demand or the purchasing patterns or behavior of our customers;
•application of new or revised industry standards;
•disruptions in our supply chain, including increased costs or adverse changes in availability of supplies of raw materials or components;
•increased costs of electricity and/or other energy sources, freight and logistics costs or other materials or services necessary for the operation of our business;
•the impact of corporate restructuring activities that we have and may continue to engage in;
•changes in the demand for the computer systems and data storage products that contain our products;
•unfavorable supply and demand imbalances;
•our high proportion of fixed costs, including manufacturing and research and development expenses;
•any impairments in goodwill or other long-lived assets;
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•changes in tax laws, such as global tax developments applicable to multinational businesses; the impact of trade barriers, such as import/export duties and restrictions, sanctions, tariffs and quotas, imposed by the U.S. or other countries in which the Company conducts business;
•the evolving legal and regulatory, economic, environmental and administrative climate in the international markets where the Company operates; and
•adverse changes in the performance of our products.
As a result, we believe that quarter-to-quarter and year-over-year comparisons of our revenue and results of operations may not be meaningful, and that these comparisons may not be an accurate indicator of our future performance. Our results of operations in one or more future quarters may fail to meet the expectations of investment research analysts or investors, which could diminish significantlycause an immediate and significant decline in our market value.
Any cost reduction initiatives that we undertake may not deliver the results we expect, and these actions may adversely affect our business.
From time to time, we engage in restructuring plans that have resulted and may continue to result in workforce reduction and consolidation of our real estate facilities and our manufacturing footprint. In addition, management will continue to evaluate our global footprint and cost structure, and additional restructuring plans are expected to be formalized. As a result of our restructurings, we have experienced and may in the future experience a loss of continuity, loss of accumulated knowledge, disruptions to our operations and inefficiency during transitional periods. Additionally, global footprint consolidation and reduction in excess capacity may result in us being unable to respond to increases in forecasted volume of customer demand and loss of revenue opportunity if our competitors have underutilized factories. Any cost-cutting measures could impact employee retention. In addition, we cannot be sure that any future cost reductions or global footprint consolidations will deliver the results we expect, be successful in reducing our overall expenses as we expect or that additional costs will not offset any such reductions or global footprint consolidation. If our operating costs are higher than we expect or if we do not maintain adequate control of our costs and expenses, our results of operations may be adversely affected.
Changes in the macroeconomic environment may in the future negatively impact our results of operations.
Changes in macroeconomic conditions may affect consumer and enterprise spending, and as a result, our customers may postpone or cancel spending in response to volatility in credit and equity markets, negative financial news and/or declines in income or asset values, all of any acquisitions, joint ventures, strategic alliances which may have a material adverse effect on the demand for our products and/or result in significant decreases in our product prices. Other factors that could have a material adverse effect on demand for our products and on our financial condition and results of operations include inflation, slower growth or recession, conditions in the labor market, healthcare costs, access to credit, consumer confidence and other investmentsmacroeconomic factors affecting consumer and business spending behavior.
Macroeconomic developments such as the withdrawal of the United Kingdom (“U.K.”) from the European Union (“EU”), slowing global economies, increased tariffs between the U.S and China, Mexico and other countries, or adverse economic conditions worldwide resulting from the COVID-19 pandemic and efforts of governments and private industry to slow the pandemic or efforts of governments to stimulate or stabilize the economy may adversely impact our business. For example, significant inflation and related increases in interest rates, or a recession, could negatively affect our business, operating results or financial condition or the markets in which we pursue. Even if we are successfuloperate, which, in forming strategic alliancesturn, could adversely affect the price of our ordinary shares. A general weakening of, and related declining corporate confidence in, the global economy or acquiring, forming joint ventures withthe curtailment in government or making investments in other companies, we cannotcorporate spending could cause current or potential customers to reduce their information technology (“IT”) budgets or be certain that we will realize the anticipated benefitsunable to fund data storage systems, which could cause customers to delay, decrease or synergiescancel purchases of any strategic alliance, acquisition, joint ventureour products or investment that we pursue.

Political events,cause customers not to pay us or to delay paying us for previously purchased products and services.

The effect of geopolitical uncertainties, war, terrorism, natural disasters, public health issues and other circumstances, on national and/or international commerce and on the global economy, could materially adversely affect our results of operations and financial condition.

War,

Geopolitical uncertainty, terrorism, geopolitical uncertainties,instability or war, such as the military action against Ukraine launched by Russia, natural disasters, public health issues and other business interruptions have caused and could cause damage or disruption to international commerce and the global economy, and thus could have a strong negative effect on our business, our direct and indirect suppliers, logistics providers, manufacturing vendors and customers. Our business

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operations are subject to interruption by natural disasters such as floods and earthquakes, fires, power or water shortages, terrorist attacks, other hostile acts, labor disputes, public health issues (such as the COVID-19 pandemic) and related mitigation actions, and other events beyond our control. Such events may decrease demand for our products, make it difficult or impossible for us to make and deliver products to our customers or to receive components from our direct and indirect suppliers, and create delays and inefficiencies in our supply chain.

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A significant natural disaster, such as an earthquake, fire, flood, or significant power outage could have an adverse impact on our business, results of operations, and financial condition. The impact of climate change may increase these risks due to changes in weather patterns, such as increases in storm intensity, sea-level rise, melting of permafrost and temperature extremes in areas where we or our suppliers and customers conduct business. We have a number of our employees and executive officers located in the San Francisco Bay Area, a region known for seismic activity, wildfires and drought conditions, and in Asia, near major earthquake faults known for seismic activity. To mitigate wildfire risk, electric utilities are deploying public safety power shutoffs, which affects electricity reliability to our facilities and our communities. Many of our suppliers and customers are also located in areas with risks of natural disasters. For example, many of our component suppliers are geographically concentrated in Thailand, which suffered severe flooding in October 2011 resulting in a material impact on the production and availability of many components, which caused significant increases in the cost of components. In the event of a natural disaster, losses and significant recovery time could be required to resume operations and our financial condition and operating results of operations could be materially adversely affected. Further, governmental regulations related to the environment such as Singapore’s recent adoption of a law restricting data center development may also adversely affect our customers or our introduction of new products or services resulting in adverse effects on our financial condition and results of operations.
Should major public health issues, including pandemics, arise, we could be negatively affected by stringent employee travel restrictions, additional limitations or cost increases in freight and other logistical services, governmental actions limiting the movement of products or employees between regions, increases in or changes to data collection and reporting obligations, delays in production ramps of new products, and disruptions in our operations and those of some of our key direct and indirect suppliers and customers.

Failure For example, the recent COVID-19 pandemic resulted in government-imposed travel restrictions, border closures, stay-at-home orders, facility closures or operating constraints in a number of our global locations, disruptions in our operations and those of our suppliers, partners, and customers, increases in air freight rates, limited numbers of employees available to comply with applicable environmentalstaff manufacturing operations, and shortages of supplies of personal protective equipment required for our manufacturing operations. If any of these circumstances continue for an extended period of time, our manufacturing ability and capacity, or those of our key direct and indirect suppliers or customers, could be impacted, and our results of operations and financial condition could be adversely affected.

LEGAL, REGULATORY AND COMPLIANCE RISKS
Our business is subject to various laws, regulations, governmental policies, litigation, governmental investigations or governmental proceedings that may cause us to incur significant expense or adversely impact our results or operations and financial condition.
Our business is subject to regulation under a wide variety of U.S. federal and state and non-U.S. laws, regulations and policies. There can be no assurance that laws, regulations and policies will not be changed in ways that will require us to modify our business model and objectives or affect our returns on investments by restricting existing activities and products, subjecting them to escalating costs or prohibiting them outright. In particular, governmental focus on antitrust and competition law, improper payments, the environment, data privacy, protection, security and sovereignty, currency exchange controls, conflict minerals, import and export controls, complex economic sanctions, and potential further changes to global tax laws and tax laws in any jurisdiction in which we operate have had and may continue to have an effect on our business, corporate structure, operations, sales, liquidity, capital requirements, effective tax rate, results of operations, and financial performance. China, Malaysia, Northern Ireland, Singapore and Thailand, in which we have significant operating assets, and the European Union each have exercised and continue to exercise significant influence over many aspects of their domestic economies including, but not limited to, fair competition, tax practices, anti-corruption, anti-trust, data privacy, protection, security and sovereignty, price controls and international trade.
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Our business is subject to state, federal, and international laws and regulations, customer requirementsrelating to data privacy, data protection and regulations regarding conflicts mineralsdata security involving matters including data use, data localization, data transfer, data storage, data retention and otherdeletion, data access, and the protection of data and systems. Compliance with these laws and regulations applicablecan be onerous and have increased and may continue to increase our cost of doing business globally or otherwise adversely impact financial results. Our introduction of new products or services, changes to our existing products or services, or the manner in which our customers utilize our products or services may result in new or enhanced costly compliance requirements or governmental or regulatory scrutiny that could adversely affect our business and financial results. Data privacy and data protection regulations also continue to change and may be inconsistent from jurisdiction to jurisdiction and may adversely affect our business by requiring changes to our business practices, limiting our ability to offer a product or service, or making our products or services less attractive to customers. Laws and regulations related to data transfers, including, data localization, data access, and data storage, also continue to develop and have been subject to regulatory and judicial scrutiny. In many cases, these laws apply to transfers of information between us and our subsidiaries, and among us, our subsidiaries and our customers or other parties with which we have commercial relations. If we are restricted in our sharing of data among countries and regions in which we operate, among our subsidiaries, or with third parties with which we have a commercial relationship, it may increase our compliance costs and adversely impact our operations, the ability to provide our products or services, or the manner in which we provide our product or services. Our business is subject to state, federal, and international laws and regulations that subject us to requirements to notify vendors, customers, or employees of a data security breach. Any actual or perceived data security breach or incident or actual or perceived non-compliance with laws relating to privacy, data protection or data security could result in damage to our brand and reputation including decreased customer demand for our products or services, significant financial penalties and liability, governmental investigations and proceedings, ongoing audit requirements, private or class actions, and unanticipated changes to our data handling or processing practices. We cannot be certain that our insurance coverage is adequate for data-handling or data-security liabilities incurred, or that insurance will continue to be available to us on economically reasonable terms or at all, or that any insurer will not deny coverage as to any future claim. The successful assertion of one or more claims against us that exceed our insurance coverage, or changes in our insurance policies, could have a material adverse effect on our business, including our financial condition, operating results ofand reputation. For example, the European General Data Protection Regulation (“GDPR”) took effect in May 2018, and applies to our operations, and financial condition.

our products and services used by individuals in Europe. The U.K. has implemented legislation that substantially implements the GDPR, with penalties for noncompliance. Various states, such as California, Colorado, Utah and Connecticut, have implemented similar privacy laws and regulations that impose restrictive requirements regulating the use and disclosure of personal information.The California Consumer Privacy Act (“CCPA”), which took effect in January 2020, imposed compliance requirements and new rights for California consumers. The U.S. federal government also is contemplating privacy legislation.

Further, the sale and manufacturing of products in certain states and countries has and may continue to subject us and our suppliers to state, federal and international laws and regulations governing protection of the environment, including those governing climate change, discharges of pollutants into the air and water, the management and disposal of hazardous substances and wastes, the cleanup of contaminated sites, restrictions on the presence of certain substances in electronic products and the responsibility for environmentally safe disposal or recycling. We endeavor to ensure that we and our suppliers comply with all applicable environmental laws and regulations, however, compliance has increased and may continue to increase our operating costs and may otherwise impact future financial results. If additional or more stringent requirements are imposed on us in the future, we could incur additional operating costs and capital expenditures. If we fail to comply with applicable environmental laws, regulations, initiatives, or standards of conduct, our customers may refuse to purchase our products and we could be subject to fines, penalties and possible prohibition of sales of our products into one or more states or countries, liability to our customers and damage to our reputation, which could result in a material adverse effect on our financial condition or results of operations.

SEC rules require certain disclosures regarding the use of specified minerals, oroften referred to as conflict minerals, that are necessary to the functionality or production of products manufactured or contracted to be manufactured. These rules could affect our ability to source, directly or indirectly, certain materials used in our products at competitive prices and could impact the availability of certain minerals used in the manufacture of our products, including gold, tantalum, tin and tungsten. As there may be only a limited number of suppliers of “conflict free” minerals, we cannot be sure that we will be able to obtain necessary conflict free minerals in sufficient quantities or at competitive prices. Our customers, including our OEM customers, may require that our products be free of conflict minerals, and our revenues and margins may be harmed if we are unable to procure conflict free minerals at a reasonable price, or at all, or are unable to pass through any increased costs associated with meeting these demands. We may also face challenges with government regulators and our customers and suppliers if we are unable to sufficiently verify that the metals used in our products are conflict free. Furthermore, our customers and manufacturing stakeholders may place increased demands on our compliance framework which may in turn negatively impact our relationships with our suppliers. If we are unable to comply with requirements regarding the use of conflict and other minerals, our business, financial condition or results of operations may be materially adversely affected.

Any cost reduction initiatives that we undertake may not deliver the results we expect, and these actions may adversely affect our business.

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From time to time, we engagehave been and may continue to be involved in restructuring plansvarious legal, regulatory or administrative investigations, inquiries, negotiations or proceedings arising in the normal course of business. In the event of litigation, government investigations or governmental proceedings, we are subject to the inherent risks and uncertainties that may result if outcomes differ from our expectations. In the event of adverse outcomes in workforce reductionany litigation, investigation or government proceeding, we could be required to pay substantial damages, fines or penalties and consolidationcease certain practices or activities, which could materially harm our business. The costs associated with litigation and government investigations can also be unpredictable depending on the complexity and length of time devoted to such litigation or investigation. Litigation, investigations or government proceedings may also divert the efforts and attention of our real estate facilities andkey personnel, which could also harm our manufacturing footprint. business.
In addition, managementregulation or government scrutiny may impact the requirements for marketing our products and slow our ability to introduce new products, resulting in an adverse impact on our business. Although we have implemented policies and procedures designed to ensure compliance, there can be no assurance that our employees, contractors or agents will not violate these or other applicable laws, rules and regulations to which we are and may be subject. Violations of these laws and regulations could lead to significant penalties, restraints on our export or import privileges, monetary fines, government investigations, disruption of our operating activities, damage to our reputation and corporate brand, criminal proceedings and regulatory or other actions that could materially adversely affect our results of operations. The political and media scrutiny surrounding a governmental investigation for the violation of such laws, even if an investigation does not result in a finding of violation, could cause us significant expense and collateral consequences, including reputational harm, that could have an adverse impact on our business, results of operations and financial condition.
Some of our products and services are subject to export control laws and other laws affecting the countries in which our products and services may be sold, distributed, or delivered, and any changes to or violation of these laws could have a material adverse effect on our business, results of operations, financial condition and cash flows.
Due to the global nature of our business, we are subject to import and export restrictions and regulations, including the Export Administration Regulations administered by the U.S. Commerce Department’s Bureau of Industry and Security (“BIS”) and the trade and economic sanctions regulations administered by the U.S. Treasury Department’s Office of Foreign Assets Control (“OFAC”). We incorporate encryption technology into certain of our products and solutions. These encryption products and the underlying technology may be exported outside of the United States only with export authorizations, including by license, a license exception or other appropriate government authorizations, including the filing of an encryption registration. The U.S., through the BIS and OFAC, places restrictions on the sale or export of certain products and services to certain countries, persons and entities, as well as for certain end-uses, such as military, military-intelligence and weapons of mass destruction end-uses. The U.S. government also imposes sanctions through executive orders restricting U.S. companies from conducting business activities with specified individuals and companies. Although we have controls and procedures to ensure compliance with all applicable regulations and orders, we cannot predict whether changes in laws or regulations by the U.S., China or another country will affect our ability to sell our products and services to existing or new customers. Additionally, we cannot ensure that our interpretation of relevant restrictions and regulations will be accepted in all cases by relevant regulatory and enforcement authorities.
Violators of any U.S. export control and sanctions laws may be subject to significant penalties, which may include monetary fines, criminal proceedings against them and their officers and employees, a denial of export privileges, and suspension or debarment from selling products to the U.S. government. Moreover, the sanctions imposed by the U.S. government could be expanded in the future. Our products could be shipped to those targets or for restricted end-uses by third parties, including potentially our channel partners, despite our precautions. In addition, if our partners fail to obtain appropriate import, export or re-export licenses or permits, we may also be adversely affected, through reputational harm as well as other negative consequences including government investigations and penalties. A significant portion of our sales are to customers which are located in geographies that have been the focus of recent changes in U.S. policies. Any further limitation that impedes our ability to export or sell our products and services could materially adversely affect our business, results of operations and financial condition.
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Other countries also regulate the import and export of certain encryption and other technology, including import and export licensing requirements, and have enacted laws that could limit our ability to sell or distribute our products and services or could limit our partners’ or customers’ ability to sell or use our products and services in those countries, which could materially adversely affect our business, results of operations and financial condition. Violations of these regulations may result in significant penalties and fines. Changes in our products and services or future changes in export and import regulations may create delays in the introduction of our products and services in those countries, prevent our customers from deploying our products and services globally or, in some cases, prevent the export or import or sale of our products and services to certain countries, governments or persons altogether. From time to time, various governmental agencies have proposed additional regulation of encryption technology, including the escrow and government recovery of private encryption keys. Any change in export or import regulations, economic sanctions or related legislation, increased export and import controls, or change in the countries, governments, persons or technologies targeted by such regulations, in the countries where we operate could result in decreased use of our products and services by, or in our decreased ability to export or sell our products and services to, new or existing customers, which could materially adversely affect our business, results of operations and financial condition.
If we were ever found to have violated applicable export control laws, we may be subject to various penalties available under the laws, any of which could have a material and adverse impact on our business, results of operations and financial condition. Even if we were not found to have violated such laws, the political and media scrutiny surrounding any governmental investigation of us could cause us significant expense and reputational harm. Such collateral consequences could have a material adverse impact on our business, results of operations, financial condition and cash flows.
Changes in U.S. trade policy, including the imposition of sanctions or tariffs and the resulting consequences, may have a material adverse impact on our business and results of operations.
We face uncertainty with regard to U.S. government trade policy. Current U.S. government trade policy includes tariffs on certain non-U.S. goods, including information and communication technology products. These measures may materially increase costs for goods imported into the United States. This in turn could require us to materially increase prices to our customers which may reduce demand, or, if we are unable to increase prices to adequately address any tariffs, quotas or duties, could lower our margin on products sold and negatively impact our financial performance. Changes in U.S. trade policy have resulted in, and could result in more, U.S. trading partners adopting responsive trade policies, including imposition of increased tariffs, quotas or duties. Such policies could make it more difficult or costly for us to export our products to those countries, therefore negatively impacting our financial performance.
We may be unable to protect our intellectual property rights, which could adversely affect our business, financial condition and results of operations.
We rely on a combination of patent, trademark, copyright and trade secret laws, confidentiality agreements, security measures and licensing arrangements to protect our intellectual property rights. In the past, we have been involved in significant and expensive disputes regarding our intellectual property rights and those of others, including claims that we may be infringing patents, trademarks and other intellectual property rights of third parties. We expect that we will be involved in similar disputes in the future.
There can be no assurance that:
•any of our existing patents will continue to evaluate our global footprint and cost structure, and additional restructuring plans are expected to be formalized. As a resultheld valid, if challenged;
•patents will be issued for any of our restructuring, pending applications;
•any claims allowed from existing or pending patents will have sufficient scope or strength to protect us;
•our patents will be issued in the primary countries where our products are sold in order to protect our rights and potential commercial advantage;
•we may experience a loss of continuity, loss of accumulated knowledge, disruptionswill be able to protect our trade secrets and other proprietary information through confidentiality agreements with our customers, suppliers and employees and through other security measures; and
•others will not gain access to our trade secrets.
In addition, our competitors may be able to design their products around our patents and other proprietary rights. Enforcement of our rights often requires litigation. If we bring a patent infringement action and are not successful, our competitors would be able to use similar technology to compete with us. Moreover, the defendant in such an action may successfully countersue us for infringement of their patents or assert a counterclaim that our patents are invalid or unenforceable.
Furthermore, we have significant operations and inefficiency during transitional periods. Additionally, global footprint consolidationsales in countries where intellectual property laws and reductionenforcement policies are often less developed, less stringent or more difficult to enforce than in excess capacity may result in us being unable to respond to increases in forecasted volume of customer demand and loss of revenue opportunity if our competitors have underutilized factories. Any cost-cutting measures could impact employee retention. In addition,the United States. Therefore, we cannot be surecertain that the cost reduction and global footprint consolidationwe will be successfulable to protect our intellectual property rights in reducing our overall expenses as we expect or that additional costs will not offset any such reductions or global footprint consolidation. If our operating costs are higher than we expect or if we do not maintain adequate controljurisdictions outside the United States.
31
Table of our costs and expenses, our results of operations may be adversely affected.

Seagate Technology public limited company | 2019 Form 10-K | 27

Contents

Our ability to use our net operating loss and tax credit carryforwards might be limited.

The use of a portion of our U.S. net operating loss and tax credit carryforwards is subject to annual limitations pursuant to U.S. tax law. Sections 382 and 383 of the U.S. Internal Revenue Code generally impose annual limitations on the amount of net operating loss and tax credit carryforwards that might be used to offset taxable income when a corporation has undergone significant changes in ownership. As a result, future changes in ownership could put further limitations on the availability of our net operating loss or tax credit carryforwards. See “Item 8. Financial Statements and Supplementary Data—Note 7.Income Taxes” contained in this report for, among other things, a description of current net operating loss and tax credit carryforward limitations.

We are at times subject to intellectual property legal proceedings and claims which could cause us to incur significant additional costs or prevent us from selling our products, and which could adversely affect our results of operations and financial condition.

We are subject fromtime-to-time to legal proceedings and claims, including claims of alleged infringement of the patents, trademarks and other intellectual property rights of third parties by us, or our customers, in connection with theirthe use of our products. Intellectual property litigation can be expensive and time-consuming, regardless of the merits of any claim, and could divert our management’s attention from operating our business. In addition, intellectual property lawsuits are subject to inherent uncertainties due to the complexity of the technical issues involved, which may cause actual results to differ materially from our expectations. Patent litigation has increased due to the current uncertainty of the law and the increasing competition and overlap of product functionality in the field. Some of the actions that we face fromtime-to-time seek injunctions against the sale of our products and/or substantial monetary damages, which, if granted or awarded, could materially harm our business, financial condition and operating results.

results.

We cannot be certain that our products do not and will not infringe issued patents or other intellectual property rights of others. We may not be aware of currently filed patent applications that relate to our products or technology. If patents are later issued on these applications, we may be liable for infringement. If our products were found to infringe the intellectual property rights of others, we could be required to pay substantial damages, cease the manufacture, use and sale of infringing products in one or more geographic locations, expend significant resources to developnon-infringing technology, discontinue the use of specific processes or obtain licenses to the technology infringed. We might not be able to obtain the necessary licenses on acceptable terms, or at all, or be able to reengineer our products successfully to avoid infringement. Any of the foregoing could cause us to incur significant costs and prevent us from selling our products, which could adversely affect our results of operations and financial condition. See “Item 8“Item 8. Financial Statements and Supplementary Data-NoteData—Note 14.Legal, Environmental and Other Contingencies” contained in this report for a description of pending intellectual property proceedings.

proceedings.

Our business and certain products and services depend in part on IP and technology licensed from third parties, as well as data centers and infrastructure operated by third parties.
Some of our business and some of our products rely on or include software licensed from third parties, including open source licenses. We may not be able to obtain or continue to obtain licenses from these third parties at all or on reasonable terms, or such third parties may demand cross-licenses to our intellectual property. Third-party components and technology may become obsolete, defective or incompatible with future versions of our products or services, or our relationship with the third party may deteriorate, or our agreements may expire or be terminated. We may face legal or business disputes with licensors that may threaten or lead to the disruption of inbound licensing relationships. In order to remain in compliance with the terms of our licenses, we monitor and manage our use of third-party software, including both proprietary and open source license terms to avoid subjecting our products and services to conditions we do not intend, such as the licensing or public disclosure of our intellectual property without compensation or on undesirable terms. The terms of many open source licenses have not been interpreted by U.S. courts, and these licenses could be construed in a way that could impose unanticipated conditions or restrictions on our ability to commercialize our products or services. Additionally, some of these licenses may not be available to us in the future on terms that are acceptable or that allow our product offerings to remain competitive. Our inability to obtain licenses or rights on favorable terms could have a material effect on our business, financial condition, results of operations and cash flow, including if we are required to take remedial action that may divert resources away from our development efforts.
In addition, we also rely upon third-party hosted infrastructure partners globally to serve customers and operate certain aspects of our business or services. Any disruption of or interference at our hosted infrastructure partners would impact our operations and our business could be adversely impacted.
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RISKS RELATED TO INFORMATION TECHNOLOGY, DATA AND INFORMATION SECURITY
We could suffer a loss of revenue and increased costs, exposure to significant liability including legal and regulatory consequences, reputational harm and other serious negative consequences in the event of cyber-attacks, ransomware or other cyber security breaches or incidents that disrupt our operations or result in unauthorized access to, or the loss, corruption, unavailability or dissemination of proprietary or confidential information of our customers or about us or other third parties.
Our operations are dependent upon our ability to protect our digital infrastructure and data. We manage and store various proprietary information and sensitive or confidential data relating to our operations, as well as to our customers, suppliers, employees and other third parties, and we will store subscribers’ data on our edge-to-cloud mass storage platform. As our operations become more automated and increasingly interdependent and our edge-to-cloud mass storage platform service grows, our exposure to the risks posed by storage, transfer, and maintenance of data, such as corruption, loss or unavailability of, or damage to, and other security risks to, data, will continue to increase. We use third-party vendors to store and otherwise process data for us and they face similar risks. The measures we and our vendors have implemented to secure our computer equipment and data belonging to us, our customers, suppliers, employees or other third parties have been and may continue to be vulnerable to phishing, employee error, hacking, ransomware and other cyberattacks, malfeasance, system error or other irregularities or incidents, including from breaches and incidents or attacks at third party vendors we utilize, and may not be sufficient for all eventualities. We cannot ensure that any limitation-of-liability provisions in our customer and user agreements, contracts with third-party vendors and service providers or other contracts are enforceable or adequate or would protect us from any liabilities or damages with respect to claims relating to a security breach or other security-related matter. Threat actors may be able to penetrate our network security, misappropriate or compromise confidential information and other data, create system disruptions or cause shutdowns. Threat actors also may be able to develop and deploy viruses, worms and other malicious software programs that attack our products and services or otherwise exploit any security vulnerabilities of our products and services. Such attempts are increasing in technical sophistication, number and the ability to evade detection or to obscure such activities. We anticipate that these threats will continue to grow in scope and complexity over time. Because the techniques used to obtain unauthorized access, or to sabotage systems, change frequently and generally are not recognized until launched against a target, we may be unable to anticipate these techniques or to implement adequate preventative measures. Although we take steps to protect against and detect such attempts, our intellectual property rights, whichefforts may not be sufficient for all eventualities, including sustained maintenance of remote working requirements. In addition, sophisticated hardware and operating system software and applications that we produce or procure from third parties may contain defects in design or manufacture, including “bugs” and other problems that could unexpectedly interfere with the operation of the system or our services. We have been, and will likely continue to be, subject to computer viruses or other malicious code, cyber-attacks or other computer-related attempts to breach the IT systems we use for these purposes. We have been and may also continue to be subject to IT system failures and network disruptions due to these factors. To date, these attacks have not had a material impact on our operations, but we cannot provide assurance that they will not have a material impact in the future. The insurance coverage we maintain that is intended to address certain data security risks may be insufficient to cover all types of claims or losses that may arise, and such insurance has been increasing in price over time. We cannot be certain that insurance coverage will continue to be available to us on economically reasonable terms, or at all.
The costs to us to eliminate or address the foregoing security problems and security vulnerabilities before or after a security breach or incident could be significant. System redundancy may be ineffective or inadequate, certain legacy IT systems may not be easily remediated, and our disaster recovery planning may not be sufficient for all eventualities. Our remediation efforts may not be successful and could result in interruptions, delays or cessation of service, and loss of existing or potential customers that may impede our sales, manufacturing, distribution or other critical functions. We could lose existing or potential customers for cloud and outsourcing services or other IT solutions in connection with any actual or perceived security vulnerabilities in our products and services. Some of our products and services contain encryption and other measures implemented in an effort to protect third-party content stored on our products. Such measures may be compromised, breached or circumvented or otherwise fail and losses or unauthorized access to or releases of our, our customers’ or third parties’ confidential information may occur. Security breaches or incidents and unauthorized access to, or loss, corruption, unavailability, or the unapproved dissemination of proprietary information or sensitive or confidential data about us or our customers or other third parties, has exposed us and could expose us, our vendors and customers or other third parties affected to a risk of loss or misuse of this information, and result in litigation or governmental investigations, fines, penalties, indemnity obligations and other potential liability and costs for us, materially damage our brand or otherwise materially harm our business. In addition, we rely in certain capacities on third-party data management providers whose possible security problems and security vulnerabilities may have similar effects on us. Our business, brand and reputation could also be materially adversely affectaffected by media or other reports of perceived security vulnerabilities in our products, services, network or processes, even if unsubstantiated.
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We must successfully maintain and upgrade our IT systems, and our failure to do so could have a material adverse effect on our business, financial condition and results of operations.

We rely on a combination of patent, trademark, copyright

From time to time, we expand and trade secret laws, confidentiality procedures and licensing arrangementsimprove our IT systems to protectsupport our intellectual property rights. In the past,business going forward. Consequently, we have been involved in significant and expensive disputes regarding our intellectual property rights and those of others, including claims that we may be infringing patents, trademarks and other intellectual property rights of third-parties. We expect that we will be involved in similar disputesare in the future.

There can be no assurance that:

anyprocess of our existing patentsimplementing, and will continue to be held valid, if challenged;

invest in and implement, modifications and upgrades to our IT systems and procedures, including making changes to legacy systems or acquiring new systems with new functionality, and building new policies, procedures, training programs and monitoring tools.

patents will be issued for anyWe are engaged in a multi-year implementation of a new global enterprise resource planning system (“ERP”) which requires significant investment of human and financial resources. The ERP is designed to efficiently maintain our financial records and provide information important to the operation of our pending applications;

any claims allowed from existingbusiness to our management team. In implementing the ERP, we may experience significant increases to inherent costs and risks associated with changing and acquiring these systems, policies, procedures and monitoring tools, including capital expenditures, additional operating expenses, demands on management time and other risks and costs of delays or pending patents will have sufficient scopedifficulties in transitioning to or strength to protect us;

integrating new systems policies, procedures or monitoring tools into our patents will be issuedcurrent systems. Any significant disruption or deficiency in the primary countries wheredesign and implementation of the ERP may adversely affect our products are soldability to process orders, ship product, send invoices and track payments, fulfill contractual obligations, maintain effective disclosure controls and internal control over financial reporting or otherwise operate our business. These implementations, modifications and upgrades may not result in order to protect our rights and potential commercial advantage;

we will be able to protect our trade secrets and other proprietary information through confidentiality agreements with our customers, suppliers and employees and through other security measures; and

others will not gain access to our trade secrets.

Seagate Technology public limited company | 2019 Form 10-K | 28

productivity improvements at a level that outweighs the costs of implementation, or at all. In addition, difficulties with implementing new technology systems, such as ERP, delays in our competitors may be abletimeline for planned improvements, significant system failures or our inability to design their products aroundsuccessfully modify our patents and other proprietary rights. Enforcement ofIT systems, policies, procedures or monitoring tools to respond to changes in our rights often requires litigation. If we bring a patent infringement action and are not successful, our competitors would be able to use similar technology to compete with us. Moreover, the defendant in such an action may successfully counter sue us for infringement of their patents or assert a counterclaim that our patents are invalid or unenforceable.

Furthermore, we have significant operations and sales in foreign countries where intellectual property laws and enforcement policies are often less developed, less stringent or more difficult to enforce thanbusiness needs in the United States. Therefore, we cannot be certain that we will be able to protectpast have caused and in the future may cause disruptions in our intellectual property rights in jurisdictions outside the United States.

business operations, increase data security risks, and may have a material adverse effect on our business, financial condition and results of operations.

RISKS RELATED TO OWNING OUR ORDINARY SHARES
The price of our ordinary shares may be volatile and could decline significantly.

The market price of our ordinary shares has experienced price fluctuationsfluctuated and could be subjectmay continue to wide fluctuations in the future. The market price of our ordinary shares may fluctuate or decline significantly in response to severalvarious factors including:

some of which are beyond our control, including:

•general stock market conditions, or general uncertainty in stock market conditions occasioned bydue to global economic conditions and negative financial news unrelated to our business or industry;

industry, including the impact of the COVID-19 pandemic;

•the timing and amount of or the discontinuance of our share repurchases;

•actual or anticipated variations in our results of operations;

•announcements of innovations, new products, significant contracts, acquisitions, or significant price reductions by us or our competitors, including those competitors who offer alternative storage technology solutions;

•our failure to meet our guidance or the performance estimates of investment research analysts;

the timing of announcementsanalysts, or changes in financial estimates by us or our competitors of significant contracts or acquisitions;

investment research analysts;

•significant announcements by or changes in financial condition of a large customer, if any;

customer;

general stock market conditions;

•the ability of our customers to procure necessary components which may impact their demand or timing of their demand for our products, especially during a period of persistent supply chain shortages;

•actual or perceived security breaches or security vulnerabilities;

•the occurrence of major catastrophic events;

events, including natural disasters, acts of war or climate change;

changes in financial estimates by investment research analysts;

•actual or anticipated changes in the credit ratings of our indebtedness by rating agencies; and

•the sale of our ordinary shares held by certain equity investors or members of management.

Market price fluctuations of our ordinary shares could impact the value of our equity compensation, which could affect our ability to recruit and retain employees.

In addition, in the past, following periods of decline in the market price of a company’s securities, class action lawsuits have often been pursued against that company. If similar litigation were pursued against us, it could result in substantial costs and a diversion of management’s attention and resources, which could materially adversely affect our results of operations, financial condition and liquidity.







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Any decision to reduce or discontinue the payment of cash dividends to our shareholders or the repurchase of our ordinary shares pursuant to our previously announced share repurchase program could cause the market price of our ordinary shares to decline significantly.

Although historically we have announced regular cash dividend payments and a share repurchase program, we are under no obligation to pay cash dividends to our shareholders in the future at historical levels or at all or to repurchase our ordinary shares at any particular price or at all. The declaration and payment of any future dividends is at the discretion of our Board of Directors and ourDirectors. Our previously announced share repurchase program may be suspended or discontinued at any time. Our payment of quarterly cash dividends and the repurchase of our ordinary shares pursuant to our share repurchase program are subject to, among other things, our financial position and results of operations, distributable reserves, available cash and cash flow, capital and regulatory requirements, market and economic conditions, our ordinary share price and other factors. Any reduction or discontinuance by us of the payment of quarterly cash dividends or the repurchase of our ordinary shares pursuant to our share repurchase program could cause the market price of our ordinary shares to decline significantly. Moreover, in the event our payment of quarterly cash dividends or repurchases of our ordinary shares are reduced or discontinued, our failure to resume such activities at historical levels could result in a persistent lower market valuation of our ordinary shares.

shares.
ITEM 1B.

UNRESOLVED STAFF COMMENTS

ITEM 1B.UNRESOLVED STAFF COMMENTS
None.

Seagate Technology public limited company | 2019 Form 10-K | 29

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ITEM 2.

PROPERTIES

ITEM 2.PROPERTIES
Our principal executive offices are located in Ireland. Our principal manufacturing facilities are located in China, Malaysia, Northern Ireland, Singapore, Thailand and the United States. Our principal product development facilities are located in California, Colorado, Minnesota and Singapore. Our leased facilities are occupied under leases that expire on various dates through 2082.

2068.

Our main material manufacturing, product development and marketing and administrative facilities at June 28, 2019July 1, 2022 are as follows:

Location

Building(s)

Owned or Leased

Approximate
Square Footage

Primary Use

United StatesEurope

California

Northern Ireland		Owned/Leased554,000
SpringtownOwned479,000 Manufacture of recording heads
United States
CaliforniaOwned412,000 Product development, marketing and administrative and operational offices

Colorado

Owned/LeasedOwned528,000 528,000Product development, administrative and operational offices

Minnesota

Owned/Leased1,098,000 1,096,000Manufacture of recording heads and product development

Europe

Asia
China

Northern Ireland

WuxiLeased707,000 

Springtown

Owned479,000Manufacture of recording heads

Asia

China

Wuxi

Leased704,000Manufacture of drives and drive subassemblies

Malaysia

Johor
Owned (1)
631,000 Manufacture of substrates

Johor

Owned(1)631,000Manufacture of substrates

Singapore

Woodlands

Singapore
Woodlands
Owned/Leased(1)
1,511,000 1,511,000Manufacture of media, administrative and operational offices

Ayer Rajah

Owned(1)
410,000 410,000Product development, administrative and operational offices

Thailand

Korat

Thailand
KoratOwned/Leased2,710,000 2,731,000Manufacture of drives and drive subassemblies

Teparuk

Owned/Leased453,000 422,000Manufacture of drive subassemblies

(1)

Land leases for these facilities expire on various dates through 2068.

(1) Land leases for these facilities expire on various dates through 2068.
As of June 28, 2019,July 1, 2022, we owned or leased a total of approximately 11.09.7 million square feet of space worldwide. The 11.09.7 million square feet of owned or leased space includes a total of 1.3 million68,000 square feet that is currently unoccupied. Substantially all of this unoccupied space relates to owned facilities that are being actively marketed for disposition.subleased. We believe that our existing properties are in good operating condition and are suitable for the operations for which they are used.

ITEM 3.

LEGAL PROCEEDINGS

ITEM 3.LEGAL PROCEEDINGS
See “Item 8. Financial Statements and Supplementary Data—Note 14.Legal, Environmental and Other Contingencies.”

ITEM 4.

MINE SAFETY DISCLOSURES

ITEM 4.MINE SAFETY DISCLOSURES
Not applicable.

Seagate Technology public limited company | 2019 Form 10-K | 30

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PART II

ITEM 5.

MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

ITEM 5.MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market Information

Our ordinary shares trade on the NASDAQ Global Select Market under the symbol “STX.”

As of July 29, 2019,August 1, 2022, there were approximately 561 holders489 holders of record of our ordinary shares. We did not sell any of our equity securities during fiscal year 20192022 that were not registered under the Securities Act of 1933, as amended.

Performance Graph

The performance graph below shows the cumulative total shareholder return on our ordinary shares for the period from June 27, 201430, 2017 to June 28, 2019.July 1, 2022. This is compared with the cumulative total return of the Dow Jones USU.S. Computer Hardware Index and the Standard & Poor’s 500 Stock Index (“S&P 500”) over the same period. The graph assumes that on June 27, 2014,30, 2017, $100 was invested in our ordinary shares and $100 was invested in each of the other two indices, with dividends reinvested on the date of payment without payment of any commissions. Dollar amounts in the graph are rounded to the nearest whole dollar. The performance shown in the graph represents past performance and should not be considered an indication of future performance.
stx-20220701_g1.jpg
6/30/20176/29/20186/28/20197/3/20207/2/20217/1/2022
Seagate Technology Holdings plc$100.00 $152.23 $134.61 $141.83 $251.12 $211.97 
S&P 500100.00 114.26 125.78 136.03 188.84 169.66 
Dow Jones U.S. Computer Hardware100.00 130.03 140.14 251.12 384.68 384.42 

COMPARISON OF 60 MONTH

CUMULATIVE TOTAL RETURN*

Among Seagate Technology plc, The S&P 500 Index

And The Down Jones US Computer Hardware Index

LOGO

   6/27/2014   7/3/2015   7/1/2016   6/30/2017   6/29/2018   6/28/2019 

Seagate Technology plc

  $  100.00   $88.99   $53.45   $81.70   $114.86   $  103.67 

S&P 500

   100.00      107.36      110.67      128.04      144.43    157.30 

Dow Jones US Computer Hardware

   100.00    122.81    98.01    145.23    183.74    192.41 

*

$100 invested on 6/27/2014 in stock and in indices, including reinvestment of dividends.

Copyright© 2019 Bloomberg Finance L.P. All rights reserved.

Seagate Technology public limited company | 2019 Form 10-K | 31

(1) $100 invested on 6/30/2017 in shares and in indices, including reinvestment of dividends.

Dividends

Dividends

Our ability to pay dividends in the future will be subject to, among other things, general business conditions within the data storage industry, our financial results, the impact of paying dividends on our credit ratings and legal and contractual restrictions

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on the payment of dividends by our subsidiaries to us or by us to our ordinary shareholders, including restrictions imposed by covenants on our debt instruments.

Repurchases of Our Equity Securities

On October 29, 2018,21, 2020 and February 22, 2021, our Board of Directors authorized the repurchase of an additional $2.3$3.0 billion and $2.0 billion of our outstanding ordinary shares, respectively, and as a result, we had an aggregate authority to repurchase approximately $3.0$8.0 billion of itsour ordinary shares. As of June 28, 2019, $2.2July 1, 2022, $2.4 billion remained available for repurchase of ordinary shares under the existing repurchase authorization limits. All repurchases are effected as redemptions in accordance with our Articles of Association.Constitution. There is no expiration date on our repurchase authorizations.

The following table sets forth information with respect to all repurchases of our shares made during the fiscal year ended June 28, 2019,July 1, 2022, including shares withheld for statutory tax withholdings related to vesting of employee equity awards:
Period

(In millions, except average price paid per share)
Total Number of Shares Purchased (1)
Average Price Paid per Share (1)
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (1)
1st Quarter through 3rd Quarter of Fiscal Year 202215 $92.10 15 $2,844 
April 2, 2022 through April 29, 20221 83.32 1 2,746 
April 30, 2022 through May 27, 20222 81.66 2 2,568 
May 28, 2022 through July 1, 20223 78.40 3 2,366 
Through 4th Quarter of Fiscal Year 202221 21 $2,366 

Period

(In millions, except average price paid per share)

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

1st Quarter through 3rd Quarter of Fiscal Year 2019

  14  $45.74   14  $2,544 

March 30, 2019 through April 26, 2019

  —     —     —     2,544 

April 27, 2019 through May 24, 2019

  3   46.32   3   2,421 

May 25, 2019 through June 28, 2019

  5   44.57   5   2,190 
 

 

 

   

 

 

  

 

 

 

Through 4th Quarter of Fiscal Year 2019

  22    22  $2,190 
 

 

 

   

 

 

  

 

 

 

(1)

(1)Repurchase of shares including tax withholdings.

ITEM 6.

SELECTED FINANCIAL DATA

The following selected consolidated financial data set forth below is not necessarily indicative of results of future operations, and should be read in conjunction with “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the Consolidated Financial Statements and related notes thereto included in “Item 8. Financial Statements and Supplementary Data” of this Annual Report onForm 10-K, which are incorporated herein by reference, to fully understand factors that may affect the comparability of the information presented below.

Seagate Technology public limited company | 2019 Form 10-K | 32

shares including tax withholdings.

The Consolidated Statements of Operations data for the fiscal years ended June 28, 2019, June 29, 2018 and June 30, 2017, and the Consolidated Balance Sheets data as of June 28, 2019 and June 29, 2018, are derived from our audited Consolidated Financial Statements appearing elsewhere in this Annual Report onForm 10-K. The Consolidated Statements of Operations data for the fiscal years ended July 1, 2016 and July 3, 2015, and the Consolidated Balance Sheets data at June 30, 2017, July 1, 2016 and July 3, 2015, are derived from our audited Consolidated Financial Statements that are not included in this Annual Report onForm 10-K.

   Fiscal Years Ended 

(Dollars in millions, except per share data)

  June 28,
2019		   June 29,
2018		   June 30,
2017		   July 1,
2016		   July 3,
2015		 

Revenue

  $10,390   $11,184   $10,771   $11,160   $13,739 

Gross margin

   2,932    3,364    3,174    2,615    3,809 

Income from operations

   1,487    1,634    1,054    445    2,058 

Net income(a)

   2,012    1,182    772    248    1,742 

Total assets(b)

   8,885    9,410    9,268    8,213    9,801 

Total debt(b)

   4,253    4,819    5,021    4,091    4,111 

Equity

  $2,162   $1,665   $1,364   $1,593   $3,018 
          

Net income per share:

          

Basic

  $7.13   $4.10   $2.61   $0.83   $5.38 

Diluted

   7.06    4.05    2.58    0.82    5.26 

Number of shares used in per share calculations:

          

Basic

   282    288    296    299    324 

Diluted

   285    292    299    302    331 

Cash dividends declared per ordinary share

  $2.52   $2.52   $2.52   $2.43   $2.05 

(a)

The Company recorded an income tax benefit of $640 million for fiscal year 2019. The Company’s fiscal year 2019 income tax benefit included a net tax benefit of $761 million primarily associated with the release of valuation allowance on deferred tax assets driven by improvements in its profitability outlook in the U.S., including its efforts to structurally and operationally align its EDS business with the rest of the Company.

(b)

The Company adopted ASU2015-03, Interest—Imputation of interest: Simplifying the presentation of debt issuance costs, in fiscal year 2017 on a retrospective basis. The adoption of this guidance resulted in a reduction to Other assets, net and Long-term debt previously disclosed as of the fiscal years ended 2015 and 2016 by $44 million and $39 million, respectively, within the Consolidated Balance Sheets.

Supplementary Financial Data (Unaudited)

Quarterly Data

The Company operated and reported financial results based on13-week quarters in fiscal years 2019 and 2018, which ended on the Friday closest to September 30, December 31, March 31 and June 30.

   Fiscal Year 2019 Quarters Ended 

(In millions, except per share data)

  June 28,
2019		   March 29,
2019		   December 28,
2018		   September 28,
2018		 

Revenue

  $2,371   $2,313   $2,715   $2,991 

Gross margin

   624    601    794    913 

Income from operations

   332    236    416    503 

Net income (a)

   983    195    384    450 

Net income per share:

        

Basic

  $3.57   $0.69   $1.35   $1.57 

Diluted

   3.54    0.69    1.34    1.54 

Seagate Technology public limited company | 2019 Form 10-K | 33

ITEM 6.[Reserved]


   Fiscal Year 2018 Quarters Ended 

(In millions, except per share data)

  June 29,
2018		   March 30,
2018		   December 29,
2017		   September 29,
2017		 

Revenue

  $2,835   $2,803   $2,914   $2,632 

Gross margin

   904    847    877    736 

Income from operations

   505    441    433    255 

Net income

   461    381    159    181 

Net income per share:

        

Basic

  $1.61   $1.33   $0.55   $0.62 

Diluted

   1.57    1.31    0.55    0.62 

(a)

The Company recorded an income tax benefit of $692 million in the quarter ended June 28, 2019. The Company’s quarter ended June 28, 2019 income tax benefit included a net tax benefit of $761 million primarily associated with the release of valuation allowance on deferred tax assets driven by improvements in its profitability outlook in the U.S., including its efforts to structurally and operationally align its EDS business with the rest of the Company.

Seagate Technology public limited company | 2019 Form 10-K | 34

ITEM 7.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following is a discussion of the Company’s financial condition, changes in financial condition and results of operations for the fiscal years ended June 28, 2019, June 29, 2018July 1, 2022 and June 30, 2017.

July 2, 2021. Discussions of year-to-year comparisons between fiscal years 2021 and 2020 are not included in this Annual Report on Form 10-K and can be found in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended July 2, 2021, which was filed with the SEC on August 6, 2021.

You should read this discussion in conjunction with “Item 6. Selected Financial Data” and “Item 8. Financial Statements and Supplementary Data” included elsewhere in this Annual Report on Form10-K. Except as noted, references to any fiscal year mean the twelve-month period ending on the Friday closest to June 30 of that year. Accordingly, fiscal year 20192022 and 2021 both comprised of 52 weeks and ended on June 28, 2019.July 1, 2022 and July 2, 2021, respectively. Fiscal year 2018 comprised 52 weeks and ended on June 29, 2018. Fiscal year 2017 comprised 52 weeks and ended on June 30, 2017. Fiscal year 20202026 will be comprised of 53 weeks and will end on July 3, 2020. Fiscal year 2026 will also be comprised of 53 weeks and will end on July 3, 2026.

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

•

Fiscal Year 2019 Summary. Overview of financial and other highlights affecting us in fiscal year 2019.

•

Results of Operations.Analysis of our financial results comparing fiscal years 2019 and 2018 to the prior-year periods.

•

Liquidity and Capital Resources. Analysis of changes in our balance sheets and cash flows, and discussion of our financial condition including potential sources of liquidity.

•

Contractual Obligations andOff-Balance Sheet Arrangements. Overview of contractual obligations and contingent liabilities and commitments outstanding as of June 28, 2019 and an explanation ofoff-balance sheet arrangements.

•

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

•

For an overview of our business, see “Part I—Item 1. Business—Overview.”

•Fiscal Year 20192022 Summary. Overview of financial and other highlights affecting us in fiscal year 2022.
•Results of Operations. Analysis of our financial results comparing fiscal years 2022 and 2021.
•Liquidity and Capital Resources. Analysis of changes in our balance sheets and cash flows, discussion of our financial condition including potential sources of liquidity, and material cash requirements and their general purpose.
•Critical Accounting Estimates. Accounting estimates that we believe are important to understanding the assumptions and judgments incorporated in our reported financial results.
•For an overview of our business, see “Part I - Item 1. Business—Overview.”
38
Table of Contents
Fiscal Year 2022 Summary

During fiscal year 2019,2022, we shipped 347631 exabytes of HDD storage capacity. We generated revenue of $10.4approximately $11.7 billion andwith a gross marginsmargin of 28%30%, net income of $1.6 billion, diluted EPS of $7.36 and our operating cash flow was $1.8$1.7 billion. We received $1.3increased our unsecured revolving credit facility (“Revolving Credit Facility”) to $1.75 billion, from Toshiba Memory Holdings Corporation (“TMHC”, formerly known as “K.K. Pangea”) for the redemptionborrowed $1.2 billion under our new term loan facility and repaid $701 million of all of the outstanding shares ofnon-convertible preferred stock of TMHC held by us.our long-term debt. We repurchased approximately 2120 million of our ordinary shares for $963$1.8 billion and paid $610 million paid $819 millionin dividends.
Impact of COVID-19 Pandemic
The pandemic continues to impact our business and results of operations. During fiscal year 2022, we experienced the ongoing impacts of supply chain disruptions, higher logistics, materials and operational costs globally, as well as other inflationary and macroeconomic pressures. Additionally, constraints from certain component shortages impacted our ability to fulfill demand primarily for the repurchase ofour non-HDD business. Our customers also continued to experience certain supply chain and demand disruptions, resulting in demand variations across certain of our outstanding debtend markets, including impacts from periodic governmental lockdown measures. We expect these factors will continue to impact our business and paid $713 millionresults of operations over the near term.
We continue to actively monitor the effects and potential impacts of the pandemic, inflation and other macroeconomic factors on all aspects of our business, supply chain, liquidity and capital resources including governmental policies that could periodically shut down an entire city where we, our suppliers or our customers operate. We are also actively working on opportunities to lower our cost structure, drive further operational efficiencies and maintain supply chain discipline including adjusting our manufacturing production plans in dividends.response to these business conditions. We entered intoare complying with governmental rules and guidelines across all of our sites. Although we are unable to predict the future impact of the pandemic on our business, results of operations, liquidity or capital resources at this time, we expect we will continue to be negatively affected if the pandemic and related public and private health measures result in substantial manufacturing or supply chain challenges, substantial reductions or delays in demand due to disruptions in the operations of our customers or partners, disruptions in local and global economies, volatility in the global financial markets, sustained reductions or volatility in overall demand trends, restrictions on the export or shipment of our products or our customer’s products, or other unexpected ramifications from the pandemic. For a new senior unsecured revolving credit facility (the “2019 Revolving Credit Facility”)further discussion of the uncertainties and have $1.5 billion available asbusiness risks associated with the COVID-19 pandemic, see the section entitled “Risk Factors” in Part I, Item 1A of June 28, 2019.

Seagate Technology public limited company | 2019 Form 10-K | 35

our Annual Report.

Results of Operations

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

   Fiscal Years Ended 

(Dollars in millions)

  June 28,
2019		   June 29,
2018		   June 30,
2017		 

Revenue

  $  10,390   $  11,184   $  10,771 

Cost of revenue

   7,458    7,820    7,597 
  

 

 

   

 

 

   

 

 

 

Gross margin

   2,932    3,364    3,174 

Product development

   991    1,026    1,232 

Marketing and administrative

   453    562    606 

Amortization of intangibles

   23    53    104 

Restructuring and other, net

   (22)    89    178 
  

 

 

   

 

 

   

 

 

 

Income from operations

   1,487    1,634    1,054 

Other expense, net

   (115)    (216)    (239) 
  

 

 

   

 

 

   

 

 

 

Income before income taxes

   1,372    1,418    815 

(Benefit) provision for income taxes

   (640)    236    43 
  

 

 

   

 

 

   

 

 

 

Net income

  $2,012   $1,182   $772 
  

 

 

   

 

 

   

 

 

 

   Fiscal Years Ended 
   June 28,
2019		  June 29,
2018		  June 30,
2017		 

Revenue

   100%   100%   100% 

Cost of revenue

   72   70   71 
  

 

 

  

 

 

  

 

 

 

Gross margin

   28   30   29 

Product development

   10   9   11 

Marketing and administrative

   4   5   5 

Amortization of intangibles

   —     —     1 

Restructuring and other, net

   —     1   2 
  

 

 

  

 

 

  

 

 

 

Income from operations

   14   15   10 

Other expense, net

   (1)   (2)   (2) 
  

 

 

  

 

 

  

 

 

 

Income before income taxes

   13   13   8 

(Benefit) provision for income taxes

   (6)   2   1 
  

 

 

  

 

 

  

 

 

 

Net income

   19%   11%   7% 
  

 

 

  

 

 

  

 

 

 

Seagate Technology public limited company | 2019 Form 10-K | 36

 Fiscal Years Ended
(Dollars in millions)July 1,
2022		July 2,
2021
Revenue$11,661 $10,681 
Cost of revenue8,192 7,764 
Gross profit3,469 2,917 
Product development941 903 
Marketing and administrative559 502 
Amortization of intangibles11 12 
Restructuring and other, net3 8 
Income from operations1,955 1,492 
Other expense, net(276)(144)
Income before income taxes1,679 1,348 
Provision for income taxes30 34 
Net income$1,649 $1,314 
39
Table of Contents

 Fiscal Years Ended
July 1,
2022		July 2,
2021
Revenue100 %100 %
Cost of revenue70 73 
Gross margin30 27 
Product development8 8 
Marketing and administrative5 5 
Amortization of intangibles— — 
Restructuring and other, net— — 
Operating margin17 14 
Other expense, net(3)(2)
Income before income taxes14 12 
Provision for income taxes— — 
Net income14 %12 %

The following table summarizes information regarding consolidated revenuerevenues by channel, geography, and geography, HDD price per terabytemarket and HDD exabytes shipped:shipped by market and price per terabyte:
 Fiscal Years Ended
July 1,
2022		July 2,
2021
Revenues by Channel (%)  
OEMs75 %69 %
Distributors14 %18 %
Retailers11 %13 %
Revenues by Geography (%) (1)
  
Asia Pacific46 %49 %
Americas40 %34 %
EMEA14 %17 %
Revenues by Market (%)
Mass capacity68 %60 %
Legacy23 %32 %
Other9 %8 %
HDD Exabytes Shipped by Market
Mass capacity541 417 
Legacy90 118 
Total631 535 
HDD Price per Terabyte$17 $18 

   Fiscal Years Ended 
   June 28,
2019		  June 29,
2018		  June 30,
2017		 

Revenue by Channel (%)

    

OEMs

   70%   70%   70% 

Distributors

   17%   17%   17% 

Retailers

   13%   13%   13% 

Revenue by Geography (%)(1)

    

Americas

   32%   33%   33% 

EMEA

   19%   18%   20% 

Asia Pacific

   49%   49%   47% 

HDD Price per Terabyte

  $30  $33  $41 

HDD Exabytes Shipped

   347   338   263 

(1)

(1)Revenue is attributed to countries based on the bill from location.

Fiscal Year 2019 Compared to Fiscal Year 2018

geography based on the bill from location.

Revenue

   Fiscal Years Ended 

(Dollars in millions)

  June 28,
2019		   June 29,
2018		   Change   %
Change		 

Revenue

  $10,390   $11,184   $(794)    (7)% 

Fiscal Years Ended
(Dollars in millions)July 1,
2022		July 2,
2021		Change%
Change
Revenue$11,661 $10,681 $980 9 %
40
Table of Contents
Revenue in fiscal year 2019 decreased2022 increased approximately 7%9%, or $0.8 billion,$980 million, from fiscal year 2018,2021, primarily due to less favorable market conditions during the first half of the fiscal year and price erosion,an increase in mass capacity exabytes shipped, partially offset by ana decrease in legacy exabytes shipped. The mass capacity storage markets continued to increase as a percentage of our total revenue and exabytes shipped in fiscal year 2022. We expect this transition from legacy to mass capacity storage markets will continue, resulting in mass capacity continuing to increase as a percentage of our total revenue and total exabytes shipped.

shipped in fiscal year 2023 and beyond. The long-term outlook for legacy markets is for a decrease in exabyte demand.

Cost of Revenue and Gross Margin

   Fiscal Years Ended 

(Dollars in millions)

  June 28,
2019		  June 29,
2018		  Change   %
Change		 

Cost of revenue

  $7,458  $7,820  $(362)    (5)% 

Gross margin

   2,932   3,364   (432)    (13)% 

Gross margin percentage

   28%   30%    

 Fiscal Years Ended
(Dollars in millions)July 1,
2022		July 2,
2021		Change%
Change
Cost of revenue$8,192 $7,764 $428 6 %
Gross profit3,469 2,917 552 19 %
Gross margin30 %27 %  
For fiscal year 2019,2022, gross margin as a percentage of revenue decreasedincreased compared to the prior fiscal year primarily due to price erosionan increase in mass capacity exabytes shipped and improved product mix shift towards higher capacity HDDs, partially offset by improved product mix.

Seagate Technology public limited company | 2019 Form 10-K | 37

higher component and logistics costs resulting from the pandemic and global inflationary pressures.

Operating Expenses

   Fiscal Years Ended 

(Dollars in millions)

  June 28,
2019		   June 29,
2018		   Change   %
Change		 

Product development

  $991   $1,026   $(35)    (3)% 

Marketing and administrative

   453    562    (109)    (19)% 

Amortization of intangibles

   23    53    (30)    (57)% 

Restructuring and other, net

   (22)    89    (111)    (125)% 
  

 

 

   

 

 

   

 

 

   

Operating expenses

  $  1,445   $  1,730   $(285)   
  

 

 

   

 

 

   

 

 

   

 Fiscal Years Ended
(Dollars in millions)July 1,
2022		July 2,
2021		Change%
Change
Product development$941 $903 $38 4 %
Marketing and administrative559 502 57 11 %
Amortization of intangibles11 12 (1)(8)%
Restructuring and other, net3 8 (5)(63)%
Operating expenses$1,514 $1,425 $89 
Product Development Expense.Product development expenses for fiscal year 2019 decreased2022 increased by $35$38 million from fiscal year 20182021 primarily due to a $38$25 million increase in materials expense, a $17 million increase in depreciation expenses,an $8 million increase in compensation and other employee benefits as a result of increase in share-based compensation and a $3 million increase in equipment expense, partially offset by a $12 million decrease in outside services expense and a $9 million decrease in variable compensation expense, partially offset by a $5 million increase in other employee benefits.

expense.

Marketing and Administrative Expense.Marketing and administrative expenses for fiscal year 2019 decreased2022 increased by $109$57 million from fiscal year 20182021 primarily due to a $27$17 million decreaseincrease in salariescompensation and relatedother employee benefits as a result of the restructuring of our workforce in prior periods, a $44 million decrease in other general expenses due to related operational efficiencies, a $24 million decrease in variable compensation expense and a $14 million decreasean increase in share-based compensation, expense.

a $16 million increase in outside services expense, a $6 million increase in travel expenses as a result of the easing of pandemic-related travel restrictions, a $5 million increase in advertising costs and a $3 million increase in information technology costs.

Amortization of Intangibles.Amortization of intangibles for fiscal year 20192022 decreased by $30$1 million, as compared to fiscal year 2018,2021, due to certain intangible assets reachingthat reached the end of their useful lives.

Restructuring and Other, net.Restructuring and other, net for fiscal year 20192022 was not material.
Restructuring and other, net for fiscal year 2021 was $8 million, primarily comprised primarily of workforce reduction costs and supplier transition costs, partially offset by a $75 million net gain from the sale of a certain property partially offset by charges related to a voluntary early exit program.

Restructuring and other, net for fiscal year 2018 was comprised primarily of restructuring charges to reduce our workforce by approximately 1,100 employees. Restructuring and other, net also included a gain upon termination of $25 million from the salean operating lease.

Other Expense, net
 Fiscal Years Ended
(Dollars in millions)July 1,
2022		July 2,
2021		Change%
Change
Other expense, net$(276)$(144)$(132)92 %
41
Table of certain properties during fiscal year 2018.

Other expense, net

   Fiscal Years Ended 

(Dollars in millions)

  June 28,
2019		   June 29,
2018		   Change   %
Change		 

Other expense, net

  $(115)   $(216)   $101    (47)% 

Contents

Other expense, net for fiscal year 2019 decreased2022 increased by $101$132 million as compared to fiscal year 2018 mainly2021 primarily due to a $56net $97 million higher non-recurring gain from our strategic investments in the prior-year period, a $29 million increase in interest income on our investment inexpense from the issuance of long-term debt and a debt security, a $37$21 million net increase in gainslosses on settlement of derivatives andde-designated cash flow hedges. These changes were partially offset by a $13$16 million net decrease in interest expense due to the repayment of certain long-term debt.

foreign exchange remeasurement expense.

Income Taxes

   Fiscal Years Ended 

(Dollars in millions)

  June 28,
2019		   June 29,
2018		   Change   %
Change		 

(Benefit) provision for income taxes

  $(640)   $236   $(876)    (371)% 

 Fiscal Years Ended
(Dollars in millions)July 1,
2022		July 2,
2021		Change%
Change
Provision for income taxes$30 $34 $(4)(12)%
We recorded an income tax benefitprovision of $640$30 million for fiscal year 20192022 compared to an income tax provision of $236$34 million for fiscal year 2018.2021. Our fiscal year 2019 income tax benefit included a net tax benefit of $761 million primarily

Seagate Technology public limited company | 2019 Form 10-K | 38

associated with the release of valuation allowance on deferred tax assets driven by improvements in our profitability outlook in the U.S., including our efforts to structurally and operationally align our EDS business with the rest of the Company. Our fiscal year 20182022 income tax provision included net tax benefits of approximately $204$15 million related to share-based compensation, $6 million resulting from recognition of tax expense associated with the revaluation of U.S. deferred tax assets as a result ofand $5 million associated with change in the enactment of the U.S. Tax Cuts and Jobs Act (“the Tax Act”) on December 22, 2017, offset by the reversal of previously recorded unrecognizedapplicable tax rate within our non-U.S. operations. Our fiscal year 2021 income tax provision included net tax benefits of $7approximately $8 million primarily associated with share-based compensation and certainnon-recurring items.

$13 million related to the United Kingdom tax rate changes enacted in June 2021.

Our Irish tax resident parent holding company owns various U.S. andnon-U.S. non-Irish subsidiaries that operate in multiplenon-Irish income tax jurisdictions. Our worldwide operating income is either subject to varying rates of income tax or is exempt from income tax due to tax incentive programs we operate under in Malaysia, Singapore and Thailand. These tax incentives are scheduled to expire in whole or in part at various dates through 2025.2033. Certain tax incentives may be extended if specific conditions are met.

Our income tax benefitprovision recorded for fiscal year 2019years 2022 and 2021 differed from the provision for income taxes that would be derived by applying the Irish statutory rate of 25% to income before income taxes, primarily due to the net effect of (i) a decrease in valuation allowance for certain deferred tax assets, primarily driven by improvements in our profitability outlook in the U.S.; and (ii) tax benefits related tonon-U.S. earnings generated in jurisdictions that are subject to tax incentive programs and are considered indefinitely reinvested outside of Ireland. Our income tax provision recorded for fiscal year 2018 differed from the provision for income taxes that would be derived by applying the Irish statutory rate of 25% to income before income taxes, primarily due to the net effect of (i) tax benefits related tonon-U.S.non-Irish earnings generated in jurisdictions that are subject to tax incentive programs and are considered indefinitely reinvested outside of Ireland; and (ii) a reduction in the net U.S. deferred tax assets associated with revaluation to a lower U.S. tax rate.

Based on ournon-U.S. ownership structure and subject to (i) potential future increases in our valuation allowance for deferred tax assets; and (ii) a future change in our intention to indefinitely reinvest earnings from our subsidiaries outsidecurrent year generation of Ireland, weresearch credits.

We anticipate that our effective tax rate in future periods will generally be less than the Irish statutory rate.

The Tax Act significantly revised U.S. corporate income tax law by, among other things, lowering U.S. corporate income tax ratesrate based on our ownership structure, our intention to indefinitely reinvest earnings from 35% to 21%, implementing a territorial tax system, and imposing aone-time transition tax on deemed repatriated earningsour subsidiaries outside ofnon-U.S. subsidiaries.

The U.S. tax law changes, including limitations on various business deductions such as executive compensation under Internal Revenue Code §162(m), will not materially impact our current tax expense in the short-term due to our large net operating loss and tax credit carryovers. The Tax Act’s new international rules, including Global IntangibleLow-Taxed Income (“GILTI”), Foreign Derived Intangible Income (“FDII”) and Base Erosion Anti-Avoidance Tax (“BEAT”), are effective beginning in fiscal year 2019. For fiscal year 2019, we have included these effects of the Tax Act in our financial statements and concluded the impact is not material.

As of the quarter ended September 28, 2018, pursuant to SEC Staff Accounting Bulletin (“SAB”) 118 (regarding the application of Accounting Standards Codification (“ASC”) 740—Income Taxes associated with the enactment of the Tax Act), we had considered SAB 118 and concluded our accounting under ASC 740 for the provisions of the Tax Act was complete. There were no adjustments deemed necessary in fiscal year 2019.

Fiscal Year 2018 Compared to Fiscal Year 2017

Revenue

   Fiscal Years Ended 

(Dollars in millions)

  June 29,
2018		   June 30,
2017		   Change   %
Change		 

Revenue

  $11,184   $10,771   $413    4% 

Revenue in fiscal year 2018 increased approximately 4% or $0.4 billion, from fiscal year 2017, as a result of an increase in exabytes shipped driven primarily by higher demand for our high capacity HDD product portfolio, partially offset by price erosion.

Seagate Technology public limited company | 2019 Form 10-K | 39

Cost of Revenue and Gross Margin

   Fiscal Years Ended 

(Dollars in millions)

  June 29,
2018		  June 30,
2017		  Change   %
Change		 

Cost of revenue

  $7,820  $7,597  $223    3% 

Gross margin

   3,364   3,174   190    6% 

Gross margin percentage

   30%   29%    

For fiscal year 2018, gross margin as a percentage of revenue increased by 100 basis points compared to the prior fiscal year due to favorable product mix and improved factory utilization as a result of higher demand for our high capacity HDD product portfolio, partially offset by price erosion.

Operating Expenses

   Fiscal Years Ended 

(Dollars in millions)

  June 29,
2018		   June 30,
2017		   Change   %
Change		 

Product development

  $1,026   $1,232   $(206)    (17)% 

Marketing and administrative

   562    606    (44)    (7)% 

Amortization of intangibles

   53    104    (51)    (49)% 

Restructuring and other, net

   89    178    (89)    (50)% 
  

 

 

   

 

 

   

 

 

   

Operating expenses

  $1,730   $2,120   $(390)   
  

 

 

   

 

 

   

 

 

   

Product Development Expense.Product development expenses for fiscal year 2018 decreased by $206 million from fiscal year 2017 primarily due to a $97 million decrease in salaries and related benefits as a result of the restructuring of our workforce in prior periods, an $83 million decrease due to related operational efficiencies and a $26 million decrease due to impairment charges related to the closure of our Korea design center in fiscal year 2017, which did not recur in fiscal year 2018.

Marketing and Administrative Expense.Marketing and administrative expenses for fiscal year 2018 decreased by $44 million from fiscal year 2017 primarily due to a $54 million decrease in salaries and related benefits as a result of the restructuring of our workforce in prior periods, partially offset by an increase in other general expenses.

Amortization of Intangibles. Amortization of intangibles for fiscal year 2018 decreased by $51 million, as compared to fiscal year 2017, due to certain intangible assets reaching the end of their useful lives.

Restructuring and Other, net. Restructuring and other, net for fiscal year 2018 was comprised primarily of restructuring charges recorded during the fiscal quarters ended September 29, 2017 and December 29, 2017 to reduce our workforce by approximately 1,100 employees. Restructuring and other, net also included a gain of $25 million from the sale of certain properties previously classified as held for sale.

Restructuring and other, net for fiscal year 2017 was comprised of restructuring charges recorded during the fiscal quarters ended September 30, 2016 and March 31, 2017 to reduce our workforce by approximately 6,800 employees, as we continue to consolidate our global footprint across Asia, EMEA Ireland and the Americas.

Other expense, net

   Fiscal Years Ended 

(Dollars in millions)

  June 29,
2018		   June 30,
2017		   Change   %
Change		 

Other expense, net

  $(216)   $(239)   $23    (10)% 

Seagate Technology public limited company | 2019 Form 10-K | 40

Other expense, net for fiscal year 2018 decreased by $23 million, as compared to fiscal year 2017 due to a $26 million increasepotential future increases in interest income primarily driven by higher interest rates, a $9 million net decrease in losses related to strategic investments and a $6 million net decrease in losses due to favorable changes in foreign currency exchange rates, partially offset by an $18 million net increase in interest expense due to the issuance of $1.25 billion of Senior Notes in fiscal year 2017 and reduced by the subsequent repurchase of certain debt.

Income Taxes

   Fiscal Years Ended 

(Dollars in millions)

  June 29,
2018		   June 30,
2017		   Change   %
Change		 

Provision for income taxes

  $236   $43   $193    449% 

We recorded an income tax provision of $236 million for fiscal year 2018 compared to an income tax provision of $43 million for fiscal year 2017. Our fiscal year 2018 income tax provision included approximately $204 million of tax expense associated with the revaluation of U.S. deferred tax assets as a result of the enactment of the Tax Act on December 22, 2017, offset by the reversal of previously recorded unrecognized tax benefits of $7 million, andcertain non-recurring items. Our fiscal year 2017 income tax provision included approximately $2 million of net tax expense associated with variousnon-recurring items.

Our income tax provision recorded for fiscal year 2018 differed from the provision for income taxes that would be derived by applying the Irish statutory rate of 25% to income before income taxes, primarily due to the net effect of (i) tax benefits relatedto non-U.S. earnings generated in jurisdictions that are subject to tax incentive programs and are considered indefinitely reinvested outside of Ireland; and (ii) a reduction in the net U.S. deferred tax assets associated with revaluation to a lower U.S. tax rate. Our income tax provision recorded for fiscal year 2017 differed from the provision for income taxes that would be derived by applying the Irish statutory rate of 25% to income before income taxes, primarily due to the net effect of (i) tax benefits relatedto non-U.S. earnings generated in jurisdictions that are subject to tax incentive programs and are considered indefinitely reinvested outside of Ireland; (ii) a decrease inour valuation allowance for certain deferred tax assets; and (iii) permanent differences.

assets.

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Liquidity and Capital Resources

The following sections discuss our principal liquidity requirements, as well as our sources and uses of cash and our liquidity and capital resources. Our cash and cash equivalents are maintained in investments with remaining maturities of 90 days or less at the time of purchase. Our short-term investments consist primarily of money market funds, time deposits and certificates of deposit. The principal objectives of our investment policy are the preservation of principal and maintenance of liquidity. We believe our cash equivalents and short-term investments are liquid and accessible. We operate in some countries that have restrictive regulations over the movement of cash and/or foreign exchange across their borders. However, we believe our sources of cash have been and will continue to be sufficient to fund our operations and meet our cash needsrequirements for the next 12 months. Although there can be no assurance, we believe that our financial resources, along with controlling our costs, will allow us to manage the ongoing impacts of the pandemic on our business operations for the foreseeable future. However, some challenges posed by the pandemic to our industry and to our business continue to remain uncertain and cannot be predicted at this time. Consequently, we will continue to evaluate our financial position in light of future developments, particularly those relating to the pandemic.
We are not aware of any downgrades, losses or other significant deterioration in the fair value of our cash equivalents or short-term investments and we do not believe the fair value of our short-term investments has significantly changed from the values reported as of June 28, 2019.

July 1, 2022.

Cash and Cash Equivalents

   As of 

(Dollars in millions)

  June 28,
2019		   June 29,
2018		   Change 

Cash and cash equivalents

  $2,220   $1,853   $367 

 As of
(Dollars in millions)July 1,
2022		July 2,
2021		Change
Cash and cash equivalents$615 $1,209 $(594)
Our cash and cash equivalents increaseddecreased by $367$594 million from June 29, 2018July 2, 2021 primarily as a result of repurchases of our ordinary shares of $1.8 billion, repayment of long-term debt of $701 million, payment of dividends to our shareholders of $610 million and payments for capital expenditures of $381 million, partially offset by net cash flow of $1.8$1.7 billion provided by operating activities and $1.3net proceeds of $1.2 billion cash inflows from the redemption of investment innon-convertible preferred stock of TMHC, offset by payments for capital expenditures of $602 million, net cash outflows for repurchase of our ordinary

Seagate Technology public limited company | 2019 Form 10-K | 41

shares of $963 million, dividends paid out to shareholders of $713 million and net repaymentissuance of long-term debt of $574 million.debt. The following table summarizes results from the Consolidated Statement of Cash Flows for the periods indicated:

   Fiscal Years Ended 

(Dollars in millions)

  June 28,
2019		   June 29,
2018		   June 30,
2017		 

Net cash flow provided by (used in):

      

Operating activities

  $1,761   $2,113   $1,916 

Investing activities

   846    (1,588)    (459) 

Financing activities

   (2,212)    (1,211)    (46) 

Effect of foreign currency exchange rates

   (1)    —      —   
  

 

 

   

 

 

   

 

 

 

Net increase (decrease) in cash, cash equivalents and restricted cash

  $394   $(686)   $1,411 
  

 

 

   

 

 

   

 

 

 

 Fiscal Years Ended
(Dollars in millions)July 1,
2022		July 2,
2021
Net cash flow provided by (used in):  
Operating activities$1,657 $1,626 
Investing activities(352)(466)
Financing activities(1,899)(1,673)
Net decrease in cash, cash equivalents and restricted cash$(594)$(513)
Cash Provided by Operating Activities

Cash provided by operating activities for fiscal year 20192022 was approximately $1.8$1.7 billion and includes the effects of net income adjusted fornon-cash items including depreciation, amortization, share-based compensation a releaseand:
•an increase of valuation allowance related$228 million in accounts payable, primarily due to our U.S. deferred tax assets and:

a decreasetiming of $204payments and an increase in materials purchased; partially offset by

•an increase of $374 million in accounts receivable, primarily due to lower revenue;linearity of sales; and

a decrease•an increase of $80$361 million in inventories, primarily due to a decreasetiming of shipments, and an increase in units built; partially offset by

a decreasematerials purchased for production of $268 million in accounts payable, primarily duehigher capacity drives and to a decrease in direct material purchases; and

mitigate supply chain disruptions.

a decrease of $84 million in accrued employee compensation, primarily due to a decrease in our variable compensation expense.

Cash provided by operating activities for fiscal year 20182021 was approximately $2.1$1.6 billion and includes the effects of net income adjusted fornon-cash items including depreciation, and amortization, deferred income taxesshare-based compensation and:

•an increase of $58 million in accrued employee compensation, primarily due to the remeasurement ofan increase in our U.S. deferred tax assets at the lower corporate tax rate, share-basedvariable compensation and:

expense; partially offset by

•an increase of $65 million in accounts payable, primarily due to timing of payments of capital expenditures; and

a decrease of $71 million in vendor receivables, primarily due to improved collections; partially offset by

an increase of $71$64 million in inventories, primarily due to an increase in units built.

Cash provided by operating activitiesmaterials purchased for fiscal year 2017 was approximately $1.9 billionincreased production of higher capacity drives and includes the effectsto mitigate supply chain disruptions; and

•an increase of net income adjusted fornon-cash items including depreciation and amortization, share-based compensation and:

a decrease of $122$42 million in accounts receivable, primarily due to a decrease in revenue and improved collections; and

an increase of $121 million in accounts payable, primarily due to timing of payments for material purchases; partially offset by

an increase of $114 million in inventories, primarily due to an increase in units builtrevenue.

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Cash Used in connection with our manufacturing footprint consolidating activities.

Cash Provided by (Used in) Investing Activities

In fiscal year 2019,2022, we received $0.8 billionused $352 million for net cash investing activities, which was primarily due to proceeds of $1.3 billion from the redemption of an investment innon-convertible preferred stock of TMHC and the proceeds of $144 million primarily from the sale of certain properties, partially offset by the payments for the purchase of property, equipment and leasehold improvements of approximately $602 million.

Seagate Technology public limited company | 2019 Form 10-K | 42

In fiscal year 2018, we used $1.6 billion for net cash investing activities, which was primarily due to our investment in the TMHC debt security of $1.3 billion$381 million and the payments for the purchase of property, equipment and leasehold improvementsinvestments of approximately $366$18 million, partially offset by the proceeds of $69 million from the sale of properties.

investments of $47 million.

In fiscal year 2017,2021, we used $459$466 million for net cash investing activities, which was primarily due to payments for the purchase of property, equipment and leasehold improvements of approximately $434 million.

$498 million, partially offset by proceeds from the sale of investments of $29 million

Cash Used in Financing Activities

Net cash used in financing activities of $2.2$1.9 billion for fiscal year 20192022 was primarily attributable to the following activities:

•$963 million1.8 billion in payments for repurchases of our ordinary shares;

•$713701 million net repurchases of long-term debt; and

•$610 million in dividend payments; and

partially offset by

•$574 million net repayment of long-term debt.

Net cash used in financing activities of $1.21.2 billion for fiscal year 2018 was primarily attributable tofrom the following activities:

$726 million in dividend payments;

$361 million in payments for repurchases of ordinary shares; and

$214 million of repaymentsissuance of long-term debt; offset by

and

•$11368 million in proceeds from the issuance of ordinary shares under employee stock plans.

Net cash used in financing activities of $46 million$1.7 billion for fiscal year 20172021 was primarily attributable to the following activities:

net proceeds•$2.0 billion in payments for repurchases of $1.2 billion receivedour ordinary shares; and

•$649 million in dividend payments; partially offset by
•$986 million from the issuance of $750 million of 4.25% Senior Notes due 2022Notes; and $500 million of 4.875% Senior Notes due 2024;

•$86108 million in proceeds from the issuance of ordinary shares under employee stock plans; offset by

plans.

$561 million in dividend payments;

$460 million in payments for repurchases of ordinary shares; and

$316 million of redemption and repurchase of long-term debt.

Liquidity Sources

Our primary sources of liquidity as of June 28, 2019,July 1, 2022, consist of: (1) approximately $2.2 billion$615 million in cash and cash equivalents, (2) cash we expect to generate from operations and (3) $1.5$1.75 billion available for borrowing from our 2019 Revolving Credit Facility.

On February 20, 2019, we terminatedunder our senior unsecured revolving credit facility scheduled to expire on January 15, 2020,(“Revolving Credit Facility”), which is part of our credit agreement (the “Credit Agreement”).

As of July 1, 2022, no borrowings (including swing line loans) were outstanding and no commitments were utilized for letters of credit issued under which we were able to draw up to $700 million. Upon termination, we and our subsidiary Seagate HDD Cayman entered into the 2019Revolving Credit Facility. The Revolving Credit Facility which provides usis available for borrowings, subject to compliance with a $1.3 billion senior unsecured revolving credit facility. On May 28, 2019, we increased our 2019 Revolvingfinancial covenants and other customary conditions to borrowing.
The Credit Facility from $1.3 billion to $1.5 billion. The 2019 Revolving Credit Facility also allows us to increase the facility by up to an aggregate of $100 million provided that (i) there has been, and will be after giving effect to such increase, no default, (ii) the increase is at least $25 million and (iii) the existing commitments under the facility receive 0.50% most favored nation protection.

As of June 28, 2019, no borrowings were drawn and no letters of credit or swing line loans had been utilized under the 2019 Revolving Credit Facility.

The 2019 Revolving Credit FacilityAgreement includes three financial covenants: (1) interest coverage ratio, (2) total leverage ratio and (3) a minimum liquidity amount. The 2019 Revoltingterm of the Revolving Credit Facility has a final maturity of February 20, 2024.

Seagate Technology public limited company | 2019 Form 10-K | 43

is through October 14, 2026. As of June 28, 2019,July 1, 2022, we were in compliance with all of the covenants under our debt agreements. Based on our current outlook and the information we currently have available to us, we expect to be in compliance with the covenants in our debt agreements over the next 12 months.

As of July 1, 2022, cash and cash equivalents held bynon-Irish subsidiaries was $2.2 billion.$614 million. This amount is potentially subject to taxation in Ireland upon repatriation by means of a dividend into our Irish parent. However, it is our intent to indefinitely reinvest earnings ofnon-Irish subsidiaries outside of Ireland and our current plans do not demonstrate a need to repatriate such earnings by means of a taxable Irish dividend. Should funds be needed in the Irish parent company and should we be unable to fund parent company activities through means other than a taxable Irish dividend, we would be required to accrue and pay Irish taxes on such dividend.

We believe that our sources of cash will be sufficient to fund our operations and meet our cash requirements for at least the next 12 months.

Our ability to fund liquidity requirements beyond 12 months will depend on our future cash flows, which are determined by future operating performance, and therefore, subject to prevailing global macroeconomic conditions and financial, business and other factors, some of which are beyond our control. For additional information on factors that could impact our ability to fund our operations and meet our cash requirements, including the COVID-19 pandemic, see the section entitled “Risk Factors” in Part I, Item 1A of this Annual Report.

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Cash Requirements and Commitments

Our liquidity requirements are primarily to meet our working capital, product development and capital expenditure needs, to fund scheduled payments of principal and interest on our indebtedness, and to fund our quarterly dividend and any future strategic investments. Our ability
Purchase obligations
Purchase obligations are defined as contractual obligations for the purchase of goods or services, which are enforceable and legally binding on us, and that specify all significant terms. From time to fundtime, we enter into long-term, non-cancelable purchase commitments or make large up-front investments with certain suppliers in order to secure certain components or technologies for the production of our products or to supplement our internal manufacturing capacity for certain components. As of July 1, 2022, we had unconditional purchase obligations of approximately $4.5 billion, primarily related to purchases of inventory components with our suppliers. We expect $1.5 billion of these requirements willcommitmentsto be paid within one year.
Capital expenditures
We incur material capital expenditures to design and manufacture our products that depend on our future cash flows, which are determined by future operating performance,advanced technologies and therefore, subjectmanufacturing techniques. As of July 1, 2022, we had unconditional commitment of $307 million primarily related to prevailing global macroeconomic conditions and financial, business and other factors, somepurchases of equipment, of which approximately $167 million is expected to be paid within one year. For fiscal year 2023, we expect capital expenditures to be aligned to our long-term targeted range of 4% to 6% of revenue.
Operating leases
We are beyonda lessee in several operating leases related to real estate facilities for warehouse and office space. As of July 1, 2022, the amount of future minimum rent expense for both occupied and vacated facilities net of sublease income under non-cancelable operating lease contracts was $58 million, of which $14 million is expected to be paid within one year. Refer to “Item 8. Financial Statements and Supplementary Data—Note 6. Leases” for details.
Long-term debt and interest payments on debt
As of July 1, 2022, the future principal payment obligation on our control.

long-term debt was $5.7 billion, of which $585 million will mature within one year. As of July 1, 2022, future interest payments on these outstanding debt is estimated to be approximately $1.3 billion, of which $223 million is expected to be paid within one year. From time to time, we may repurchase any of our outstanding senior notes in open market or privately negotiated purchases or otherwise, or we may repurchase outstanding senior notes pursuant to the terms of the applicable indenture. Refer to “Item 8. Financial Statements and Supplementary Data—Note 4. Debt” for more details.

Income Tax
As of July 1, 2022, we had a liability for unrecognized tax benefits and an accrual for the payment of related interest totaling $3 million, none of which is expected to be settled within one year. Outside of one year, we are unable to make a reasonably reliable estimate of when cash settlement with a taxing authority will occur.
Dividends
On July 30, 2019,21, 2022, our Board of Directors declared a quarterly cash dividend of $0.63$0.70 per share, which will be payable on October 9, 20195, 2022 to shareholders of record as of the close of business on September 25, 2019.

As21, 2022. Our ability to pay dividends in the future will be subject to, among other things, general business conditions within the data storage industry, our financial results, the impact of June 28, 2019, we were in compliance with allpaying dividends on our credit ratings and legal and contractual restrictions on the payment of thedividends by our subsidiaries to us or by us to our ordinary shareholders, including restrictions imposed by covenants underon our debt agreements. Based on our current outlook, we expect to be in compliance with the covenants in our debt agreements over the next 12 months.

The carrying value of our debt as of June 28, 2019 and June 29, 2018 was $4.3 billion and $4.8 billion, respectively. The table below presents the principal amounts of our outstanding debt:

   As of 

(Dollars in millions)

  June 28,
2019		   June 29,
2018		   Change 

3.75% Senior Notes due November 2018

  $—     $499   $(499) 

4.25% Senior Notes due March 2022

   750    750    —   

4.75% Senior Notes due June 2023

   941    951    (10) 

4.875% Senior Notes due March 2024

   500    500    —   

4.75% Senior Notes due January 2025

   920    975    (55) 

4.875% Senior Notes due June 2027

   690    697    (7) 

5.75% Senior Notes due December 2034

   490    490    —   
  

 

 

   

 

 

   

 

 

 
  $4,291   $4,862   $(571) 
  

 

 

   

 

 

   

 

 

 

instruments.

Share repurchases
From time to time, at the Company’s discretion, we may repurchase any of our outstanding ordinary shares through private, open market, or broker assisted purchases, tender offers, or other means. means, including through the use of derivative transactions. Our Board of Directors increased the authorization for the repurchase of our outstanding ordinary shares by $3.0 billion on October 21, 2020, and $2.0 billion on February 22, 2021. During fiscal year 2019,2022, we repurchased approximately 2221 million of our ordinary shares including shares withheld for statutory tax withholdings related to vesting of employee equity awards. See “Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities-Repurchases of Our Equity Securities.” As of June 28, 2019, $2.2July 1, 2022, $2.4 billion remained available for repurchase under our existing repurchase authorization limit. We may limit or terminate the repurchase program at any time. All repurchases are effected as redemptions in accordance with our Articles of Association.

For fiscal year 2020, we expect capital expenditures to be within our long-term targeted range of 6% to 8% of revenue. Constitution.

We require substantial amounts of cash to fund any increased working capital requirements, future capital expenditures, scheduled payments of principal and interest on our indebtedness and payments of dividends. We will continue to evaluate and manage the retirement and replacement of existing debt and associated obligations, including evaluating the issuance of new debt securities, exchanging existing debt securities for other debt securities and retiring debt pursuant to privately negotiated
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transactions, open market purchases, tender offers or other means or otherwise. In addition, we may selectively pursue strategic alliances, acquisitions, joint ventures and investments, which may require additional capital.

Seagate Technology public limited company | 2019 Form 10-K | 44

Contractual Obligations and Commitments

Our contractual cash obligations and commitments as of June 28, 2019, are summarized in the table below:

       Fiscal Year(s) 

(Dollars in millions)

  Total   2020   2021-2022   2023-2024   Thereafter 

Contractual Cash Obligations:

          

Long-term debt

  $4,291   $—     $750   $1,441   $2,100 

Interest payments on debt

   1,364    206    412    305    441 

Purchase obligations (1)

   1,382    1,170    35    53    124 

Operating leases (2)

   125    20    26    13    66 

Capital expenditures

   322    299    23    —      —   

Other funding requirements(3)

   12    11    1    —      —   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Subtotal

   7,496    1,706    1,247    1,812    2,731 

Commitments:

          

Letters of credit or bank guarantees

   105    93    1    —      11 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

  $7,601   $1,799   $1,248   $1,812   $2,742 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

(1)

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

(2)

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

(3)

Consists of funding requirements related to strategic commitments.

As of June 28, 2019, we had a liability for unrecognized tax benefits and an accrual for the payment of related interest totaling $4 million, none of which is expected to be settled within one year. Outside of one year, we are unable to make a reasonably reliable estimate of when cash settlement with a taxing authority will occur.

Off-Balance Sheet Arrangements

As of June 28, 2019, we did not have any materialoff-balance sheet arrangements (as defined in Item 303(a)(4)(ii) ofRegulation S-K).

Critical Accounting Policies and Estimates

The Company’s accounting policies are more fully described in “Item 8. Financial Statements and Supplementary Data—Note 1. Basis of Presentation and Summary of Significant Accounting Policies”. The methods, estimates and judgments we use in applying our most critical accounting policies have a significant impact on the results we report in our consolidated financial statements. The SEC has defined the most criticalCritical accounting policies as the onesestimates are those estimates that involve a significant level of estimation uncertainty and have had or are most importantreasonably likely to the portrayal ofhave a material impact on our financial condition and operatingor results and require us to make our most difficult and subjective judgments, often as a result of the need to make estimates of matters that are highly uncertain at the time of estimation.operations. Based on this definition, our most critical accounting policies include: Revenue—Revenue - Sales Program Accruals, Warranty and Income taxes and Assessing Goodwill and Other Long-lived Assets for Impairment.Taxes. Below, we discuss these policies further, as well as the estimates and judgments involved. We also have other accounting policies and accounting estimates relating to uncollectible customer accounts, valuation of inventories, assessing goodwill and other long-lived assets for impairment, valuation of share-based payments and restructuring. We believe that these other accounting policies and accounting estimates either do not generally require us to make estimates and judgments that are as difficult or as subjective, or it is less likely that they would have a material impact on our reported results of operations for a given period.

Revenue—

Revenue -Sales Program Accruals.Accruals. We record estimated variable consideration at the time of revenue recognition as a reduction to revenue. Variable consideration generally consists of sales incentive programs, such as price protection and volume incentives aimed at increasing customer demand. For OEM sales, rebates are typically established by estimating the most likely amount of consideration expected to be received based on an OEM customer’scustomer's volume of purchases from us or other agreed upon rebate programs. For the distribution and retail channel, these sales incentive programs typically involve

Seagate Technology public limited company | 2019 Form 10-K | 45

estimating the most likely amount of rebates related to a customer’scustomer's level of sales, order size, advertising or point of sale activity as well as the expected value of price protection adjustments based on historical analysis and forecasted pricing environment. In fiscal years 2019, 2018 and 2017, totalTotal sales programs were approximately 11%14% and 14% of gross revenue.revenue in fiscal years 2022 and 2021, respectively. Adjustments to revenues due to under or over accruals for sales programs related to revenues reported in prior quarterly periods were less than 1% of gross revenue in fiscal years 2019, 20182022 and 2017.

2021.

Warranty. We estimate probable product warranty costs at the time revenue is recognized. We generally provide a warranty on our products for a period of 1 to 5 years. Our warranty provision considers estimated product failure rates, and trends (including the timing of product returns during the warranty periods), and estimated repair or replacement costs related to product quality issues, if any. Unforeseen component failures or exceptional component performance can result in changes to warranty costs. We also exercise judgment in estimating our ability to sell refurbished products.products based on historical experience. Our judgment is subject to a greater degree of subjectivity with respect to newly introduced products because of limited experience with those products upon which to base our warranty estimates.

If actual warranty costs differ substantially from our estimates, revisions to the estimated warranty liability would be required, which could have a material adverse effect on our results of operations.

Income Taxes. We make certain estimates and judgments in determining income tax expense for financial statement purposes. These estimates and judgments occur in the calculation of tax credits, recognition of income and deductions and calculation of specific tax assets and liabilities, which arise from differences in the timing of recognition of revenue and expense for income tax and financial statement purposes, as well as tax liabilities associated with uncertain tax positions. The calculation of tax liabilities involves uncertainties in the application of complex tax rules and the potential for future adjustment of our uncertain tax positions by the Internal Revenue Service or other tax jurisdictions. If estimates of these tax liabilities are greater or less than actual results, an additional tax provision or benefit will result.
The deferred tax assets we record each period depend primarily on our ability to generate future taxable income in the United States and certainnon-U.S. jurisdictions. Each period, we evaluate the need for a valuation allowance for our deferred tax assets and, if necessary, adjust the valuation allowance so that net deferred tax assets are recorded only to the extent we conclude it is more likely than not that these deferred tax assets will be realized.
In evaluating our ability to recover our deferred tax assets, in full or in part, we consider all available positive and negative evidence, including our past operating results, and our forecast of future earnings, future taxable income and prudent and feasible tax planning strategies. The assumptions utilized in determining future taxable income require significant judgment and are consistent with the plans and estimates we are using to manage the underlying businesses. Actual operating results in future years could differ from our current assumptions, judgments, and estimates. If our outlook for future taxable income changes significantly, our assessment of the need for, and the amount of, a valuation allowance may also change.

Assessing Goodwill and Other Long-lived Assets for Impairment. We perform a qualitative assessmentchange resulting in the fourth quarter of each fiscal year,an additional tax provision or more frequently if indicators of potential impairment exist, to determine if any events or circumstances exist, such as an adverse change in business climate or a decline in the overall industry that would indicate that it would more likely than not reduce the fair value of a reporting unit below its carrying amount. Based on the qualitative assessment, if it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then the Company is not required to perform the quantitative goodwill impairment test. If it is determined in the qualitative assessment that the fair value of a reporting unit is more likely than not below its carrying amount, including goodwill, then we perform a quantitative impairment test. The quantitative goodwill impairment test is performed by comparing the fair value of a reporting unit with its carrying amount. Any excess in the carrying value of a reporting unit’s goodwill over its fair value is recognized as an impairment loss, limited to the total amount of goodwill allocated to that reporting unit.

We evaluate other long-lived assets, including property, equipment and leasehold improvements and other intangible assets subject to amortization, for recoverability whenever events or changes in circumstances indicate that the carrying values of those assets may not be recoverable. We assess the recoverability of an asset group by determining if the carrying value of the asset group exceeds the sum of the projected undiscounted cash flows expected to result from the use and eventual disposition of the assets over the remaining economic life of the primary asset in the asset group. If the recoverability assessment indicates that the carrying value of the asset group is not recoverable, we will estimate the fair value of the asset group and compare it to its carrying value. The excess of the carrying value over the fair value is allocated pro rata to derive the adjusted carrying value of each asset in the asset group. The adjusted carrying value of each asset in the asset group is not reduced below its fair value.

benefit.

Recent Accounting Pronouncements

See “Item 8. Financial Statements and Supplementary Data—Note 1.Basis of Presentation and Summary of Significant Accounting Policies”Policies” for information regarding the effect of new accounting pronouncements on our financial statements.

Seagate Technology public limited company | 2019 Form 10-K |

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ITEM 7A.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

ITEM 7A.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We have exposure to market risks due to the volatility of interest rates, foreign currency exchange rates, credit rating changes and equity and bond markets. A portion of these risks may be hedged, but fluctuations could impact our results of operations, financial position and cash flows.

Interest Rate Risk. Our exposure to market risk for changes in interest rates relates primarily to our cash investment portfolio. As of June 28, 2019,July 1, 2022, we had noavailable-for-sale debt securities that had been in a continuous unrealized loss position for a period greater than 12 months. We determined noDuring fiscal year 2022, we recorded a $13 million impairment loss relating to available-for-sale debt securities were other-than-temporarily impaired as of June 28, 2019.

securities.

We have fixed rate and variable rate debt obligations. We enter into debt obligations for general corporate purposes including capital expenditures and working capital needs.

Our Term Loans bear interest at a variable rate equal to LIBOR plus a variable margin. At this time, we have not identified any material exposure associated with the phase out of LIBOR by the end of 2022.

We have entered into certain interest rate swap agreements to convert the variable interest rate on the Term Loans to fixed interest rates. The objective of the interest rate swap agreements is to eliminate the variability of interest payment cash flows associated with the variable interest rate under the Term Loans. We designated the interest rate swaps as cash flow hedges. As of July 1, 2022, the aggregate notional amount of the Company’s interest-rate swap contracts was $1.2 billion, of which $600 million will mature in September 2025 and $600 million will mature in July 2027.
The table below presents principal amounts and related fixed or weighted-average interest rates by year of maturity for our investment portfolio and debt obligations as of June 28, 2019.

   Fiscal Years Ended       

(Dollars in millions, except percentages)

  2020  2021  2022  2023  2024  Thereafter  Total  Fair Value at
June 28,
2019		 
Assets         

Cash equivalents:

         

Floating rate

  $580  $—    $—    $—    $—    $—    $580  $580 

Average interest rate

   2.42%        2.42%  

Other debt securities

         

Fixed rate

  $—    $3  $—    $—    $—    $4  $7  $7 

Average interest rate

    5.00%       5.00%  
Debt         

Fixed rate

  $—    $—    $750  $941  $500  $2,100  $4,291  $4,349 

Average interest rate

     4.25%   4.75%   4.88%   5.02%   4.81%  

July 1, 2022.

(Dollars in millions, except percentages)Fiscal Years EndedFair Value at July 1, 2022
20232024202520262027ThereafterTotal
Assets       
Money market funds, time deposits and certificates of deposit      
Floating rate$61 $— $— $— $— $— $61 $61 
Average interest rate0.99 %     0.99 %
Other debt securities
Fixed rate$— $— $— $15 $— $8 $23 $23 
Debt      
Fixed rate$540 $500 $479 $— $505 $2,490 $4,514 $4,045 
Average interest rate4.75 %4.88 %4.75 %— %4.88 %4.09 %4.41 % 
Variable rate$45 $60 $83 $563 $60 $390 $1,201 $1,174 
Average interest rate2.92 %2.92 %2.92 %2.94 %2.90 %2.90 %2.92 %
Foreign Currency Exchange Risk.From time to time, we may enter into foreign currency forward exchange contracts to manage exposure related to certain foreign currency commitments and anticipated foreign currency denominated expenditures. Our policy prohibits us from entering into derivative financial instruments for speculative or trading purposes. At this time, we have not identified any material exposure associated with the potential changes related to the British vote to exit the European Union.

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

We did not have any materialrecognized a net gains (losses) recognizedloss of $11 million and $10 million in Cost of revenue or Other, net forand Interest expense related to the loss of hedge designations on discontinued cash flow hedges dueduring fiscal year 2022, respectively. We recognized a net gain of $14 million and a net loss of $7 million in Cost of revenue and Interest expense related to the loss of hedge ineffectiveness ordesignations on discontinued cash flow hedges during the fiscal years 2019 and 2018.

Seagate Technology public limited company | 2019 Form 10-K | year 2021.

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The table below provides information as of June 28, 2019July 1, 2022 about our foreign currency forward exchange contracts. The table is provided in U.S. dollar equivalent amounts and presents the notional amounts (at the contract exchange rates) and the weighted-average contractual foreign currency exchange rates.

(Dollars in millions, except average contract rate)Notional
Amount		Average
Contract Rate
Estimated Fair Value(1)
Foreign currency forward exchange contracts:   
Singapore Dollar$230 $1.36 $(4)
Thai Baht168 $33.58 (8)
Chinese Renminbi116 $6.54 (3)
British Pound Sterling79 $0.77 (5)
Total$593 $(20)

(Dollars in millions, except average contract rate)

  Notional
Amount		   Average
Contract
Rate		   Estimated
Fair
Value(1)		 

Foreign currency forward exchange contracts:

      

Singapore Dollar

  $100   $1.36   $1 

Chinese Renminbi

   99   $6.84    (1) 

British Pound Sterling

   18   $0.80    —   
  

 

 

     

 

 

 

Total

  $217     $—   
  

 

 

     

 

 

 

(1)

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

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

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

counterparties and may increase the cost of such capital.

We are subject to equity market risks due to changes in the fair value of the notional investments selected by our employees as part of ourNon-qualified Deferred Compensation Plans— non-qualified deferred compensation plan—the Seagate Deferred Compensation PlansPlan (the “SDCPs”“SDCP”). WeIn fiscal year 2014, we entered into a Total Return Swap (“TRS”) in order to manage the equity market risks associated with the SDCPsSDCP liabilities. We pay a floating rate, based on the London Inter-Bank Offered Rate (“LIBOR”)LIBOR plus an interest rate spread, on the notional amount of the TRS. The TRS is designed to substantially offset changes in the SDCPsSDCP liabilities due to changes in the value of the investment options made by employees. See “Item 8. Financial Statements and Supplementary Data—Note 8.Derivative Financial Instruments”Instruments” of this Report on Form10-K.

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ITEM 8.FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
ITEM 8.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Table of Contents

Page

50

51

52

53

54

55

55

61
60

65

Note 4.   Goodwill and Other Intangible Assets

65
63
64

66
68
66
69

67
70

70
73

74
76

76
77

80
82

81
83

87
83
84

87
85

88
86
86

Note 15.   Commitments

90

Note 16.   Guarantees

90

Note 17.   Subsequent Events

92

93
87

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SEAGATE TECHNOLOGY HOLDINGS PLC

CONSOLIDATED BALANCE SHEETS

(In millions, except share and per share data)

   June 28,
2019		   June 29,
2018		 
ASSETS

 

Current assets:

    

Cash and cash equivalents

  $2,220   $1,853 

Accounts receivable, net

   989    1,184 

Inventories

   970    1,053 

Other current assets

   184    220 
  

 

 

   

 

 

 

Total current assets

   4,363    4,310 

Property, equipment and leasehold improvements, net

   1,869    1,792 

Investment in debt security

   —      1,275 

Goodwill

   1,237    1,237 

Other intangible assets, net

   111    188 

Deferred income taxes

   1,114    417 

Other assets, net

   191    191 
  

 

 

   

 

 

 

Total Assets

  $8,885   $9,410 
  

 

 

   

 

 

 
LIABILITIES AND EQUITY

 

Current liabilities:

    

Accounts payable

  $1,420   $1,728 

Accrued employee compensation

   169    253 

Accrued warranty

   91    112 

Current portion of long-term debt

   —      499 

Accrued expenses

   552    598 
  

 

 

   

 

 

 

Total current liabilities

   2,232    3,190 

Long-term accrued warranty

   104    125 

Long-term accrued income taxes

   4    10 

Othernon-current liabilities

   130    100 

Long-term debt, less current portion

   4,253    4,320 
  

 

 

   

 

 

 

Total Liabilities

   6,723    7,745 

Commitments and contingencies (See Notes 14 and 15)

    

Shareholders’ Equity:

    

Preferred shares, $0.00001 par value per share—100,000,000 authorized; no shares issued or outstanding

   —      —   

Ordinary shares, $0.00001 par value per share—1,250,000,000 authorized; 269,097,971 issued and outstanding at June 28, 2019 and 287,170,363 issued and outstanding at June 29, 2018

   —      —   

Additionalpaid-in capital

   6,545    6,377 

Accumulated other comprehensive loss

   (34)    (16) 

Accumulated deficit

   (4,349)    (4,696) 
  

 

 

   

 

 

 

Total Shareholders’ Equity

   2,162    1,665 
  

 

 

   

 

 

 

Total Liabilities and Shareholders’ Equity

  $8,885   $9,410 
  

 

 

   

 

 

 

Fiscal Years Ended
July 1,
2022		July 2,
2021
ASSETS
Current assets:  
Cash and cash equivalents$615 $1,209 
Accounts receivable, net1,532 1,158 
Inventories1,565 1,204 
Other current assets321 208 
Total current assets4,033 3,779 
Property, equipment and leasehold improvements, net2,239 2,181 
Goodwill1,237 1,237 
Other intangible assets, net9 29 
Deferred income taxes1,132 1,117 
Other assets, net294 332 
Total Assets$8,944 $8,675 
LIABILITIES AND EQUITY
Current liabilities:  
Accounts payable$2,058 $1,725 
Accrued employee compensation252 282 
Accrued warranty65 61 
Current portion of long-term debt584 245 
Accrued expenses596 608 
Total current liabilities3,555 2,921 
Long-term accrued warranty83 75 
Other non-current liabilities135 154 
Long-term debt, less current portion5,062 4,894 
Total Liabilities8,835 8,044 
Commitments and contingencies (See Notes 12, 14 and 15)
Shareholders’ Equity:  
Preferred shares, $0.00001 par value per share—100,000,000 authorized; no shares issued or outstanding— — 
Ordinary shares, $0.00001 par value per share—1,250,000,000 authorized; 209,850,169 issued and outstanding at July 1, 2022 and 227,382,980 issued and outstanding at July 2, 2021— — 
Additional paid-in capital7,190 6,977 
Accumulated other comprehensive income (loss)36 (41)
Accumulated deficit(7,117)(6,305)
Total Shareholders’ Equity109 631 
Total Liabilities and Shareholders’ Equity$8,944 $8,675 
See notesNotes to consolidated financial statements.

Seagate Technology public limited company | 2019 Form 10-K | Consolidated Financial Statements.

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SEAGATE TECHNOLOGY HOLDINGS PLC

CONSOLIDATED STATEMENTS OF OPERATIONS

(In millions, except per share data)

   Fiscal Years Ended 
   June 28,
2019		   June 29,
2018		   June 30,
2017		 

Revenue

  $10,390   $11,184   $10,771 
      

Cost of revenue

   7,458    7,820    7,597 

Product development

   991    1,026    1,232 

Marketing and administrative

   453    562    606 

Amortization of intangibles

   23    53    104 

Restructuring and other, net

   (22)    89    178 
  

 

 

   

 

 

   

 

 

 

Total operating expenses

   8,903    9,550    9,717 
  

 

 

   

 

 

   

 

 

 
      

Income from operations

   1,487    1,634    1,054 
      

Interest income

   84    38    12 

Interest expense

   (224)    (236)    (222) 

Other, net

   25    (18)    (29) 
  

 

 

   

 

 

   

 

 

 

Other expense, net

   (115)    (216)    (239) 
  

 

 

   

 

 

   

 

 

 

Income before income taxes

   1,372    1,418    815 

(Benefit) provision for income taxes

   (640)    236    43 
  

 

 

   

 

 

   

 

 

 

Net income

  $2,012   $1,182   $772 
  

 

 

   

 

 

   

 

 

 
      

Net income per share:

      

Basic

  $7.13   $4.10   $2.61 

Diluted

   7.06    4.05    2.58 

Number of shares used in per share calculations:

      

Basic

   282    288    296 

Diluted

   285    292    299 

Cash dividends declared per ordinary share

  $2.52   $2.52   $2.52 

 Fiscal Years Ended
 July 1,
2022		July 2,
2021		July 3,
2020
Revenue$11,661 $10,681 $10,509 
Cost of revenue8,192 7,764 7,667 
Product development941 903 973 
Marketing and administrative559 502 473 
Amortization of intangibles11 12 14 
Restructuring and other, net3 8 82 
Total operating expenses9,706 9,189 9,209 
Income from operations1,955 1,492 1,300 
Interest income2 2 20 
Interest expense(249)(220)(201)
Other, net(29)74 (87)
Other expense, net(276)(144)(268)
Income before income taxes1,679 1,348 1,032 
Provision for income taxes30 34 28 
Net income$1,649 $1,314 $1,004 
Net income per share:   
Basic$7.50 $5.43 $3.83 
Diluted$7.36 $5.36 $3.79 
Number of shares used in per share calculations:   
Basic220 242 262 
Diluted224 245 265 
See notesNotes to consolidated financial statements.

Seagate Technology public limited company | 2019 Form 10-K | Consolidated Financial Statements.

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SEAGATE TECHNOLOGY HOLDINGS PLC

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In millions)

   Fiscal Years Ended 
   June 28,
2019		   June 29,
2018		   June 30,
2017		 

Net income

  $2,012   $1,182   $772 

Other comprehensive income (loss), net of tax:

      

Cash flow hedges

      

Change in net unrealized (loss) gain on cash flow hedges

   —      —      (3) 

Less: reclassification for amounts included in net income

   —      —      4 
  

 

 

   

 

 

   

 

 

 

Net change

   —      —      1 
  

 

 

   

 

 

   

 

 

 

Marketable securities

      

Change in net unrealized gain (loss) onavailable-for-sale debt securities

   —      —      —   

Less: reclassification for amounts included in net income

   —      —      —   
  

 

 

   

 

 

   

 

 

 

Net change

   —      —      —   
  

 

 

   

 

 

   

 

 

 

Post-retirement plans

      

Change in unrealized gain (loss) on post-retirement plans

   (16)    1    —   

Less: reclassification for amounts included in net income

   —      —      2 
  

 

 

   

 

 

   

 

 

 

Net change

   (16)    1    2 
  

 

 

   

 

 

   

 

 

 

Foreign currency translation adjustments

   (2)    —      5 
  

 

 

   

 

 

   

 

 

 

Total other comprehensive income (loss), net of tax

   (18)    1    8 
  

 

 

   

 

 

   

 

 

 

Comprehensive income

  $1,994   $1,183   $780 
  

 

 

   

 

 

   

 

 

 


 Fiscal Years Ended
 July 1,
2022		July 2,
2021		July 3,
2020
Net income$1,649 $1,314 $1,004 
Other comprehensive income (loss), net of tax:
Change in net unrealized gains (losses) on cash flow hedges:
Net unrealized gains (losses) arising during the period48 15 (27)
 Losses (gains) reclassified into earnings21 (9)3 
Net change69 6 (24)
Change in unrealized components of post-retirement plans:
Net unrealized gains (losses) arising during the period6 1 (7)
Losses reclassified into earnings2 3 1 
Net change8 4 (6)
Foreign currency translation adjustments— 15 (2)
Total other comprehensive income (loss), net of tax77 25 (32)
Comprehensive income$1,726 $1,339 $972 
See notesNotes to consolidated financial statements.

Seagate Technology public limited company | 2019 Form 10-K | Consolidated Financial Statements.

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SEAGATE TECHNOLOGY HOLDINGS PLC

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

   Fiscal Years Ended 
   June 28,
2019		   June 29,
2018		   June 30,
2017		 
OPERATING ACTIVITIES      

Net income

  $2,012   $1,182   $772 

Adjustments to reconcile net income to net cash provided by operating activities:

      

Depreciation and amortization

   541    598    749 

Share-based compensation

   99    112    137 

Impairment of assets

   3    —      42 

Deferred income taxes

   (690)    193    3 

Othernon-cash operating activities, net

   (97)    (11)    27 

Changes in operating assets and liabilities:

      

Accounts receivable, net

   204    16    122 

Inventories

   80    (71)    (114) 

Accounts payable

   (268)    65    121 

Accrued employee compensation

   (84)    16    53 

Accrued expenses, income taxes and warranty

   (81)    (46)    47 

Other assets and liabilities

   42    59    (43) 
  

 

 

   

 

 

   

 

 

 

Net cash provided by operating activities

   1,761    2,113    1,916 
  

 

 

   

 

 

   

 

 

 
INVESTING ACTIVITIES      

Acquisition of property, equipment and leasehold improvements

   (602)    (366)    (434) 

Proceeds from the sale of assets

   144    71    —   

Proceeds from settlement of foreign currency forward exchange contracts

   29    —      —   

Purchase of debt security

   —      (1,279)    —   

Proceeds from redemption of debt security

   1,283    —      —   

Purchases of strategic investments

   (18)    —      (37) 

Proceeds from sale of strategic investments

   10    —      —   

Maturities of short-term investments

   —      —      6 

Other investing activities, net

   —      (14)    6 
  

 

 

   

 

 

   

 

 

 

Net cash provided by (used in) investing activities

   846    (1,588)    (459) 
  

 

 

   

 

 

   

 

 

 
FINANCING ACTIVITIES      

Redemption and repurchase of debt

   (819)    (214)    (316) 

Dividends to shareholders

   (713)    (726)    (561) 

Repurchases of ordinary shares

   (963)    (361)    (460) 

Taxes paid related to net share settlement of equity awards

   (31)    (23)    (27) 

Net proceeds from issuance of long-term debt

   245    —      1,232 

Proceeds from issuance of ordinary shares under employee stock plans

   69    113    86 
  

 

 

   

 

 

   

 

 

 

Net cash used in financing activities

   (2,212)    (1,211)    (46) 
  

 

 

   

 

 

   

 

 

 

Effect of foreign currency exchange rate changes on cash, cash equivalents and restricted cash

   (1)    —      —   
  

 

 

   

 

 

   

 

 

 

Increase (decrease) in cash, cash equivalents and restricted cash

   394    (686)    1,411 

Cash, cash equivalents and restricted cash at the beginning of the year

   1,857    2,543    1,132 
  

 

 

   

 

 

   

 

 

 

Cash, cash equivalents and restricted cash at the end of the year

  $2,251   $1,857   $2,543 
  

 

 

   

 

 

   

 

 

 
Supplemental Disclosure of Cash Flow Information      

Cash paid for interest

  $223   $237   $172 

Cash paid for income taxes, net of refunds

  $39   $43   $33 

 Fiscal Years Ended
 July 1,
2022		July 2,
2021		July 3,
2020
OPERATING ACTIVITIES   
Net income$1,649 $1,314 $1,004 
Adjustments to reconcile net income to net cash provided by operating activities:   
Depreciation and amortization451 397 379 
Share-based compensation145 112 109 
Loss on redemption and repurchase of debt— 1 58 
Deferred income taxes(9)(4)(6)
Other non-cash operating activities, net64 (50)52 
Changes in operating assets and liabilities:   
Accounts receivable, net(374)(42)(127)
Inventories(361)(64)(166)
Accounts payable228 (14)394 
Accrued employee compensation(30)58 55 
Accrued expenses, income taxes and warranty(26)(38)(39)
Other assets and liabilities(80)(44)1 
Net cash provided by operating activities1,657 1,626 1,714 
INVESTING ACTIVITIES   
Acquisition of property, equipment and leasehold improvements(381)(498)(585)
Proceeds from the sale of assets— 4 1 
Purchases of investments(18)(4)(58)
Proceeds from sale of investments47 29 7 
Maturities of short-term investments— 3 — 
Net cash used in investing activities(352)(466)(635)
FINANCING ACTIVITIES   
Redemption and repurchase of debt(701)(33)(1,137)
Dividends to shareholders(610)(649)(673)
Repurchases of ordinary shares(1,799)(2,047)(850)
Taxes paid related to net share settlement of equity awards(51)(33)(40)
Proceeds from issuance of long-term debt1,200 1,000 994 
Proceeds from issuance of ordinary shares under employee stock plans68 108 103 
Other financing activities, net(6)(19)(2)
Net cash used in financing activities(1,899)(1,673)(1,605)
Effect of foreign currency exchange rate changes on cash, cash equivalents and restricted cash— — (1)
Decrease in cash, cash equivalents and restricted cash(594)(513)(527)
Cash, cash equivalents and restricted cash at the beginning of the year1,211 1,724 2,251 
Cash, cash equivalents and restricted cash at the end of the year$617 $1,211 $1,724 
Supplemental Disclosure of Cash Flow Information   
Cash paid for interest$244 $184 $226 
Cash paid for income taxes, net of refunds$33 $44 $51 
See notesNotes to consolidated financial statements.

Seagate Technology public limited company | 2019 Form 10-K | Consolidated Financial Statements.

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SEAGATE TECHNOLOGY HOLDINGS PLC

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

For Fiscal Years Ended June 28, 2019, June 29, 2018July 1, 2022, July 2, 2021 and June 30, 2017

July 3, 2020

(In millions)

   Number
of
Ordinary
Shares		   Par Value
of Shares		   Additional
Paid-in
Capital		   Accumulated
Other
Comprehensive
Loss		   Accumulated
Deficit		   Total 

Balance at, July 1, 2016

   299   $—     $5,929   $(25)   $(4,311)   $1,593 

Net income

           772    772 

Other comprehensive income

         8      8 

Issuance of ordinary shares under employee stock plans

   6      86        86 

Repurchases of ordinary shares

   (12)          (460)    (460) 

Tax withholding related to vesting of restricted stock units

   (1)          (27)    (27) 

Dividends to shareholders

           (745)    (745) 

Share-based compensation

       137        137 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance at, June 30, 2017

   292    —      6,152    (17)    (4,771)    1,364 

Net income

           1,182    1,182 

Other comprehensive income

         1      1 

Issuance of ordinary shares under employee stock plans

   6      113        113 

Repurchases of ordinary shares

   (10)          (361)    (361) 

Tax withholding related to vesting of restricted stock units

   (1)          (23)    (23) 

Dividends to shareholders

           (723)    (723) 

Share-based compensation

       112        112 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance at, June 29, 2018

   287    —      6,377    (16)    (4,696)    1,665 

Cumulative effect of adoption of new revenue standard (Note 1)

           34    34 

Net income

           2,012    2,012 

Other comprehensive loss

         (18)      (18) 

Issuance of ordinary shares under employee stock plans

   4      69        69 

Repurchases of ordinary shares

   (21)          (966)    (966) 

Tax withholding related to vesting of restricted stock units

   (1)          (31)    (31) 

Dividends to shareholders

           (702)    (702) 

Share-based compensation

       99        99 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance at, June 28, 2019

   269   $—     $6,545   $(34)   $(4,349)   $2,162 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

millions)

 Number of Ordinary SharesPar Value of SharesAdditional Paid-in CapitalAccumulated Other Comprehensive Income (Loss)Accumulated DeficitTotal
Balance at, June 28, 2019269 $— $6,545 $(34)$(4,349)$2,162 
Impact of adoption of new leasing standard(2)(2)
Net income1,004 1,004 
Other comprehensive loss(32)(32)
Issuance of ordinary shares under employee stock plans6 103 103 
Repurchases of ordinary shares(17)(847)(847)
Tax withholding related to vesting of restricted share units(1)(40)(40)
Dividends to shareholders ($2.58 per ordinary share)(670)(670)
Share-based compensation109 109 
Balance at, July 3, 2020257 — 6,757 (66)(4,904)1,787 
Net income1,314 1,314 
Other comprehensive income25 25 
Issuance of ordinary shares under employee stock plans4 108 108 
Repurchases of ordinary shares(33)(2,047)(2,047)
Tax withholding related to vesting of restricted share units(1)(33)(33)
Dividends to shareholders ($2.66 per ordinary share)(635)(635)
Share-based compensation112 112 
Balance at, July 2, 2021227 — 6,977 (41)(6,305)631 
Net income1,649 1,649 
Other comprehensive income77 77 
Issuance of ordinary shares under employee stock plans4 68 68 
Repurchases of ordinary shares(20)(1,806)(1,806)
Tax withholding related to vesting of restricted share units(1)(51)(51)
Dividends to shareholders ($2.77 per ordinary share)(604)(604)
Share-based compensation145 145 
Balance at, July 1, 2022210 $— $7,190 $36 $(7,117)$109 
See notesNotes to consolidated financial statements.

Seagate Technology public limited company | 2019 Form 10-K | Consolidated Financial Statements.

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SEAGATE TECHNOLOGY HOLDINGS PLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.

Basis of Presentation and Summary of Significant Accounting Policies


1.Basis of Presentation and Summary of Significant Accounting Policies
Organization

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

a storage-as-a-service cloud.

On May 18, 2021, Seagate Technology plc, now known as Seagate Technology Unlimited Company (“STUC”), and STX completed a scheme of arrangement pursuant to which STUC’s ordinary shares were acquired by STX and the ordinary shareholders of STUC received, on a one-for-one basis, new ordinary shares of STX (the “Scheme”). As a result of the Scheme, STUC is now a direct, wholly-owned subsidiary of STX, which is the successor issuer to STUC. In connection with the Scheme, STX assumed STUC’s existing obligations in connection with awards granted under STUC’s incentive plans and other similar employee awards and amended such plans and awards as necessary to provide for the issuance of STX’s registered shares rather than the ordinary shares of STUC upon the exercise or vesting of awards.
Basis of Presentation and Consolidation

The Company’s consolidated financial statements include the accounts of the Company and all its wholly-owned and majority-owned subsidiaries, after elimination of intercompany transactions and balances.

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

Fiscal Year

The Company operates and reports financial results on a fiscal year of 52 or 53 weeks ending on the Friday closest to June 30. Accordingly, fiscal years 2019, 20182022 and 2017 were2021 both comprised of 52 weeks and ended on June 28, 2019, June 29, 2018July 1, 2022 and June 30, 2017,July 2, 2021, respectively. Fiscal year 2020 was comprised of 53 weeks and ended on July 3, 2020. All references to years in these Notes to Consolidated Financial Statements represent fiscal years unless otherwise noted. Fiscal year 2020 will be comprised of 53 weeks and will end on July 3, 2020. Fiscal year 2026 will also be comprised of 53 weeks and will end on July 3, 2026.

Summary of Significant Accounting Policies

Cash and Cash Equivalents.The Company considers all highly liquid investments with a remaining maturity of 90 days or less at the time of purchase to be cash equivalents. Cash equivalents are carried at cost, which approximates fair value.

Restricted Cash and Cash Equivalents.Restricted cash and cash equivalents represent cash and cash equivalents that are restricted as to withdrawal or use for other than current operations.

Short-Term Investments.The Company has short-termCompany’s highly liquid investments that are primarily comprised of money market funds, time deposits and certificates of deposits. The Company has classified its marketable debt securities asavailable-for-sale and they are stated at fair value with unrealized gains and losses included in Accumulated other comprehensive loss,income, which is a component of Shareholders’ Equity. The Company evaluates theavailable-for sale available-for-sale debt securities in an unrealized loss position for other-than-temporary impairment. Realized gains and losses are included in Other, net on the Company’s Consolidated Statements of Operations. The cost of securities sold is based on the specific identification method.

Allowances Other cash equivalents are carried at cost, which approximates fair value.

Restricted Cash and Cash Equivalents. Restricted cash and cash equivalents represent cash and cash equivalents that are restricted as to withdrawal or use for Doubtful Accounts.other than current operations.
Allowance for expected credit loss. The Company maintains allowancesan allowance for uncollectibleexpected credit loss relating to its accounts receivable based upon expected collectability. This reserve is established based upon historical trends, global macroeconomic conditions, reasonable and supportable forecasts of future conditions and an analysis of specific exposures. The provision for doubtful accountsexpected credit loss is recorded as a charge to Marketing and administrative expense on the Company’s Consolidated Statements of Operations.

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Inventories. Inventories are valued at the lower of cost (using thefirst-in,first-out method) and net realizable value. Net realizable value is based upon the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. Adjustments to reduce cost of inventories to its net realizable value are made, if required, for estimated excess or obsolescence determined primarily by future demand forecasts.

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Property, Equipment and Leasehold Improvements.Property, equipment and leasehold improvements are stated at cost.cost less accumulated depreciation and amortization. Equipment and buildings are depreciated using the straight-line method over the estimated useful lives of the assets. Leasehold improvements are amortized using the straight-line method over the shorter of the estimated life of the asset or the remaining term of the lease. The costs of additions and substantial improvements to property, equipment and leasehold improvements, which extend the economic life of the underlying assets, are capitalized. The cost of maintenance and repairs to property, equipment and leasehold improvements is expensed as incurred.

Goodwill. The Company performs a qualitative assessment in the fourth quarter of each year, or more frequently if indicators of potential impairment exist, to determine if any events or circumstances exist, such as an adverse change in business climate or a decline in the overall industry that would indicate that it would more likely than not reduce the fair value of a reporting unit below its carrying amount, including goodwill. If it is determined in the qualitative assessment that the fair value of a reporting unit is more likely than not below its carrying amount, including goodwill, then the Company will perform a quantitative impairment test. The quantitative goodwill impairment test is performed by comparing the fair value of a reporting unit with its carrying amount. Any excess in the carrying value of a reporting unit’s goodwillunit over its fair value is recognized as an impairment loss, limited to the total amount of goodwill allocated to that reporting unit.

Other Long-lived Assets. The Company tests other long-lived assets, including property, equipment and leasehold improvements and other intangible assets subject to amortization, for recoverability whenever events or changes in circumstances indicate that the carrying value of those assets may not be recoverable. The Company performs a recoverability test to assess the recoverability of an asset group. If the recoverability test indicates that the carrying value of the asset group is not recoverable, the Company will estimate the fair value of the asset group and the excess of the carrying value over the fair value is allocated pro rata to derive the adjusted carrying value of assets in the asset group. The adjusted carrying value of each asset in the asset group is not reduced below its fair value.

In accordance with its policy, the Company reviews the estimated useful lives of its fixed assets on an ongoing basis. This review indicated that the actual lives of certain manufacturing equipment at its manufacturing facilities were longer than the estimated useful lives used for depreciation purposes in the Company’s consolidated financial statements. As a result, effective June 29, 2019, the Company changed its estimate of the useful lives of its manufacturing equipment from a range of three to five years to a range of three to seven years. The effect of this change in estimate increased the net income by $134 million for the fiscal year ended July 3, 2020 and increased the diluted earnings per share by $0.51 for the fiscal year ended July 3, 2020.
The Company tests other intangible assets not subject to amortization whenever events occur or circumstances change, such as declining financial performance, deterioration in the environment in which the entity operates or deteriorating macroeconomic conditions that have a negative effect on future expected earnings and cash flows that could affect significant inputs used to determine the fair value of the indefinite-lived intangible asset.

Assets Held for Sale.The Company classifies its long-lived assets to be sold as held for sale in the period (i) it has approved and committed to a plan to sell the asset, (ii) the asset is available for immediate sale in its present condition, (iii) an active program to locate a buyer and other actions required to sell the asset have been initiated, (iv) the sale of the asset is probable, (v) the asset is being actively marketed for sale at a price that is reasonable in relation to its current fair value and (vi) it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. The Company initially measures a long-lived asset that is classified as held for sale at the lower of its carrying value or fair value less any costs to sell. Any loss resulting from this measurement is recognized in the period in which the held for sale criteria are met. Conversely, gains are not recognized on the sale of a long-lived asset until the date of sale. Upon designation as an asset held for sale, the Company stops recording depreciation expense on the asset. The Company assesses the fair value of a long-lived asset less any costs to sell at each reporting period and until the asset is no longer classified as held for sale.

Investment in Debt Security andPayment-in-Kind (“PIK”) Income.

Leases. The Company haddetermines if an arrangement is a debt investmentlease or contains a lease at inception. Right-of-use (“ROU”) assets are included innon-convertible preferred stock of Toshiba Memory Holdings Corporation (“TMHC”, formerly known as “K.K. Pangea”) that was fully redeemed by TMHC Other assets, net and lease liabilities are included in June 2019. The Company classified the investment asheld-to-maturity as it had the positive intentAccrued expenses and ability to hold the security until maturity. Thisheld-to-maturity investment was carried at amortized cost and recorded as Investment in debt securityOther non-current liabilities on the Company’s Consolidated Balance Sheets.

Transaction costs incurred by ROU assets represent the Company’s right to use an underlying asset for the lease term and the corresponding lease liabilities represent its obligation to make lease payments arising from the lease. The Company combines lease and non-lease components for facility leases and does not recognize ROU assets and lease liabilities for leases with an initial term of 12 months or less on the consolidated balance sheets.

Lease liabilities are measured at the present value of the remaining lease payments and ROU assets are based on the lease liability, adjusted for lease prepayments, lease incentives received and the lessee’s initial direct costs. For the Company’s leases that do not provide an implicit rate, the net present value of future minimum lease payments is determined using the Company’s estimated incremental borrowing rate based on the information available at the lease commencement date. Additionally, the
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Company’s lease term may include options to extend or terminate the lease. These options are reflected in the ROU asset and lease liability when it is reasonably certain that the Company to acquire this investmentwill exercise the option. The Company’s lease agreements do not contain any material residual value guarantees.
The Company recognizes lease expense on a straight-line basis over the lease term. Variable lease payments not dependent on an index or a rate primarily consist of common area maintenance charges, are expensed as incurred, and are not included in the ROU asset and lease liability calculation. The total operating and variable lease costs were capitalized and amortized as a reduction of interest income onincluded in operating expenses in the Company’s Consolidated Statements of Operations over the respective term of the investment. The investment contained a PIK income provision, which represented contractual interest that was due upon redemption, and was accrued and recorded as Interest income each reporting period and added to the carrying value of the Investment in debt security.

Operations.

Derivative Financial Instruments. The Company records all derivatives on the balance sheet at fair value and establishes criteria for designation and effectiveness of hedging relationships. The Company continues to excludeexcludes the change in forward points from the assessment of hedge effectiveness and recognizes the excluded component in Other, net in the Consolidated

Seagate Technology public limited company | 2019 Form 10-K | 56

Statements of Operations. Foreign currency forward exchange contracts not designated as hedge instruments are used to economically hedge the foreign currency exposure on forecasted expenditures in the value of an investment denominated in currencycurrencies other than U.S. dollar. The Company recognizes the unrealized gains and losses due to the changes in the fair value of these contracts, as well as the related costs in Other, net in the Consolidated Statements of Operations along with the foreign currency gains and losses on remeasurement of such investment.

Operations.

Warranty.The Company estimates probable product warranty costs at the time revenue is recognized. The Company generally provides warranty on its products for a period of 1 to 5 years. The Company’sCompany's warranty provision considers estimated product failure rates, and trends (including the timing of product returns during the warranty periods), and estimated repair or replacement costs related to product quality issues, if any. The Company also exercises judgmentjudgement in estimating its ability to sell refurbished products. The Company’s judgment is subject to a greater degree of subjectivity with respect to newly introduced products because of limited experience with those products upon which to base our warranty estimates.

Revenue Recognition Sales Returns and Allowances, and Sales Incentive Programs.Effective June 30, 2018, the Company adopted a new revenue recognition policy in accordance with Accounting Standard Codification (“ASC”) 606, Revenue from Contracts with Customers, using the modified retrospective transition approach as discussed in the section titled Recently Adopted Accounting Pronouncements in this Note 1. Prior to fiscal year 2019, the revenue recognition policy was in accordance with ASC 605, Revenue Recognition. Under ASC 606, theThe Company determines revenue recognition through the following steps: (1) identification of the contract with a customer; (2) identification of the performance obligations in the contract; (3) determination of the transaction price; (4) allocation of the transaction price to the performance obligations in the contract; and (5) recognition of revenue when, or as, the Company satisfies a performance obligation.

Revenue from sales of products is generally recognized upon transfer of control to customers in an amount that reflects the consideration the Company expects to receive in exchange for those products, net of sales taxes. This typically occurs upon shipment from the Company. When applicable, the Company includes shipping charges billed to customers in Revenue and includes the related shipping costs in Cost of revenue on the Company’sCompany's Consolidated Statements of Operations.

The Company records estimated variable consideration at the time of revenue recognition as a reduction to revenue. Variable consideration generally consists of sales incentive programs, such as price protection and volume incentives aimed at increasing customer demand. For OEMoriginal equipment manufacturers (“OEMs”) sales, rebates are typically established by estimating the most likely amount of consideration expected to be received based on an OEM customer’s volume of purchases from Seagatethe Company or other agreed upon rebate programs. For the distribution and retail channel, these programs typically involve estimating the most likely amount of rebates related to a customer’s level of sales, order size, advertising or point of sale activity as well as the expected value of price protection adjustments based on historical analysis and forecasted pricing environment. Marketing development program costs are accrued and recorded as a reduction to revenue at the same time that the related revenue is recognized.

The Company elected a practical expedient to expenseexpenses sales commissions as incurred because the amortization period would have been one year or less. These costs are recorded as Marketing and administrative on the Company’s Consolidated Statements of Operations.

Restructuring Costs.The timing of recognition for severance costs depends on whether employees are required to render service until they are terminated in order to receive the termination benefits. If employees are required to render service until they are terminated in order to receive the termination benefits, a liability is recognized ratably over the future service period. Otherwise, a liability is recognized when management has committed to a restructuring plan and has communicated those actions to employees. Employee termination benefit costs covered by existing benefit arrangements are recognized when management has committed to a restructuring plan and the severance costs are probable and estimable.

Advertising Expense.The cost of advertising is expensed as incurred. Advertising costs were approximately $22$34 million, $28$29 million and $16$19 million in fiscal years 2019, 20182022, 2021 and 2017,2020, respectively.

Share-Based Compensation. The Company accounts for share-based compensation net of estimated forfeitures. Refer to Note 11. Share-Based Compensation for details.
Accounting for Income Taxes. The Company records a provision or benefit for income taxes for the anticipated tax consequences of the reported results of operations using the asset and liability method. Deferred income tax expense or benefit is recognized by applying enacted statutory tax rates applicable to future years to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases as well as net operating loss and tax credit carryforwards. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that
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includes the enactment date. The measurement of deferred tax assets is reduced, if necessary, by a valuation allowance for any tax benefits for which future realization is uncertain.
The Company recognizes a tax benefit only if it is more likely than not the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such positions are then measured based on the largest benefit that has a greater than 50% likelihood of being realized upon settlement.
Equity Investments. From time to time, the Company enters into certain strategic investments for the promotion of business and strategic objectives, which are accounted for either under equity method or the measurement alternative. These investments are included in Other assets, net in the Company's Consolidated Balance Sheets and are adjusted through Other, net in the Consolidated Statement of Operations.
Investments are accounted for under the equity method if the Company has the ability to exercise significant influence, but does not have a controlling financial interest. These investments are measured at cost, less any impairment plus the Company's portion of investee’s income or loss. The Company uses the financial statements of investees to determine any adjustments, which are received on a one-quarter lag.
For equity investments where the Company does not have the ability to exercise significant influence and there are no readily determinable fair values, the Company has elected to apply thewith-and-without method to assess the realization of related excess tax benefits. The Company also elected to continue to account for share-based compensation expense net of estimated forfeitures.

Seagate Technology public limited company | 2019 Form 10-K | 57

Accounting for Income Taxes. The Company makes certain estimates and judgments in determining income tax expense for financial statement purposes. These estimates and judgments occur in the calculation of tax credits, recognition of income and deductions and calculation of specific tax assets and liabilities, which arise from differences in the timing of recognition of revenue and expense for income tax and financial statement purposes, as well as tax liabilities associated with uncertain tax positions. The calculation of tax liabilities involves uncertainties in the application of complex tax rules and the potential for future adjustment of the Company’s uncertain tax positions by the Internal Revenue Service or other tax jurisdictions. If estimates of these tax liabilities are greater or less than actual results, an additional tax provision or benefit will result. The deferred tax assets the Company records each period depend primarily on the Company’s ability to generate future taxable income in the United States and certainnon-U.S. jurisdictions. Each period, the Company evaluates the need for a valuation allowance for its deferred tax assets and, if necessary, adjusts the valuation allowance so that net deferred tax assets are recorded only to the extent the Company concludes it is more likely than not that these deferred tax assets will be realized. If the Company’s outlook for future taxable income changes significantly, the Company’s assessment of the need for, and the amount of, a valuation allowance may also change.

Financial Instruments Remeasurement.Effective June 30, 2018, the Company adopted ASU2016-01,Financial Instruments,which changed the way the Company accounts for equity investments that do not qualify for the equity method of accounting.Prior to fiscal year 2019, the Company’s investments in privately-held companies without readily determinable fair value were accounted for under the cost method and were recorded at historical cost at the time of investment, with adjustments to the balance only when impairment occur. Upon adoption of ASU2016-01, the Company’s equity investment in privately-held companies without readily determinable fair values are now measured using the measurement alternative, method asunder which investments are measured at cost, less impairments,impairment, and adjusted up or down based onfor qualifying observable price changes on a prospective basis.

The Company’s strategic investments are periodically analyzed to determine whether or not there are indicators of impairment by assessing factors such as deterioration of earnings, adverse change in orderly transactions for identical or similar investmentsmarket/industry conditions, the ability to operate as a going concern, and other factors which indicate that the carrying amount of the same issuer. Any adjustments resulting from impairments and/or observable price changes are recorded as Other, netinvestment might not be recoverable. In such a case, the decrease in value is recognized in the Company’speriod the impairment occurs in the Consolidated Statements of Operations.

Comprehensive Income.The Company presents comprehensive income in a separate statement. Comprehensive income is comprised of net income and other gains and losses affecting equity that are excluded from net income.

Foreign Currency Remeasurement and Translation.The U.S. dollar is the functional currency for the majority of the Company’sCompany's foreign operations. Monetary assets and liabilities denominated in foreign currencies are remeasured into the functional currency of the subsidiary at the balance sheet date. The gains and losses from the remeasurement of foreign currency denominated balances into the functional currency of the subsidiary are included in Other, net on the Company’sCompany's Consolidated Statements of Operations. The Company’s subsidiaries that use the U.S. dollar as their functional currency remeasure monetary assets and liabilities at exchange rates in effect at the end of each period, and nonmonetary assets and liabilities at historical rates.

The Company translates the assets and liabilities of itsnon-U.S. dollar functional currency subsidiaries into U.S. dollars using exchange rates in effect at the end of each period. Revenue and expenses for these subsidiaries are translated using rates that approximate those in effect during the period. Gains and losses from these translations are recognized in foreign currency translation included in Accumulated other comprehensive loss,income, which is a component of Shareholders’ Equity.

Concentrations

Concentration of Credit Risk.The Company’s customer base for disk drive products is concentrated with a small number of customers. The Company does not generally require collateral or other security to support accounts receivable. To reduce credit risk, the Company performs ongoing credit evaluations on its customers’ financial condition. The Company establishes allowances for doubtful accountsexpected credit losses based upon factors surrounding the credit risk of customers, historical trendsglobal macroeconomic conditions and other information. Dell Inc.an analysis of specific exposures. One customer accounted for more than 10%20% and 11% of the Company’s accounts receivable as of June 28, 2019July 1, 2022 and June 29, 2018.

July 2, 2021, respectively.

Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash equivalents, investments and foreign currency forward exchange contracts. The Company mitigates concentrations of credit risk in its investmentsfinancial instruments through diversifications,diversification, by investing in highly-rated securities and/or major multinational companies.

In entering into foreign currency forward exchange contracts, the Company assumes the risk that might arise from the possible inability of counterparties to meet the terms of their contracts. The counterparties to these contracts are major

Seagate Technology public limited company | 2019 Form 10-K | 58

multinational commercial and investment banks, and the Company has not incurred and does not expect any losses as a result of counterparty defaults.

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Supplier Concentration.Certain of the raw materials, components and equipment used by the Company in the manufacture of its products are available from single-sourced direct and indirect vendors. Shortages could occur in these essential materials and components due to an interruption of supply or increased demand in the industry. If the Company were unable to procure certain materials, components or equipment at all or acceptable prices, it would be required to reduce its manufacturing operations, which could have a material adverse effect on its results of operations. In addition, the Company may make prepayments to certain suppliers or enter into minimum volume commitment agreements. Should these suppliers be unable to deliver on their obligations or experience financial difficulty, the Company may not be able to recover these prepayments.

Recently Issued Accounting Pronouncements

In February 2016,March 2020, the Financial Accounting Standards Board (“FASB”)FASB issued Accounting Standard Update(“ASU”) 2016-02ASU 2020-04 (ASC Topic 842) 848), LeasesReference Rate Reform. This ASU provides optional expedients and subsequently issuedexceptions for applying U.S. GAAP to contracts, hedging relationships and other transactions affected by reference rate reform if certain interpretive clarifications on this new guidance which amends a number of aspects of lease accounting, including requiring lessee to recognize aright-of-use (“ROU”) asset and corresponding lease liability for operating leases and enhanced disclosures. The lease liability is measured at the present valuecriteria are met. Adoption of the remaining lease paymentsexpedients and the ROU asset will be based on the lease liability andexceptions is adjusted for lease prepayments, lease incentives received and the lessee’s initial direct costs.

The Company will adoptpermitted upon issuance of this ASU effective June 29, 2019 using the modified retrospective method. The Company will elect the practical expedients which allows for not reassessing whether existing contracts contain leases, the classifications of existing leases and whether the existing initial direct costs meet the new definition. In addition, the Company will elect to combine lease andnon-lease components for facility leases and to keep leases with an initial term of 12 months or less off the balance sheet.

While the Company will continue to evaluate the effect of adopting this guidance on its consolidated financial statements and related disclosures, the Company expects to recognize ROU assets and corresponding lease liabilities of approximately $114 million and $74 million, respectively, on the Consolidated Balance Sheet, primarily relating to real estate operating leases.update through December 31, 2022. The Company does not expect the adoption of this ASU to have a material impact on its other consolidated financial statements.

In June 2016,November 2021, the FASBissued ASU 2016-132021-10 (ASC Topic 326) 832), Financial Instruments—Credit Losses: Measurement of Credit Losses on Financial InstrumentsDisclosures by Business Entities about Government Assistance. This ASU amendsrequires annual disclosures that increase the requirementtransparency of transactions involving government grants, including (1) the type of transactions, (2) the accounting for those transactions and (3) the effect of those transactions on an entity’s financial statements. The Company will adopt this new guidance beginning first quarter of fiscal year 2023 on a prospective basis and plans to disclose the aforementioned requirements in consolidated financial statements for the fiscal year ended June 30, 2023.
In June 2022, the FASB issued ASU 2022-03 (ASC Topic 820), Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions. This ASU clarifies that a contractual restriction on the measurementsale of equity security is not considered when measuring its fair value and recognition of expected credit lossesrequires new disclosures for financial assets held.equity securities subject to contractual sale restriction. The Company is required to adopt this guidance in the first quarter of fiscal year 2021. Early adoption in the first quarter of fiscal year 2020 is permitted. The Company is in the process of assessing the impact of this ASU on its consolidated financial statements.

In February 2018, the FASB issued ASU2018-02 (ASC Topic 220),Income Statement—Reporting Comprehensive Income: Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. This ASU was issued following the enactment of the U.S. Tax Cuts and Jobs Act of 2017 (“the Tax Act”) and permits entities to elect a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Act. The Company is required to adopt the guidance in the first quarter of fiscal 2020. The adoption of ASU2018-02 is not expected to have a material effect on its consolidated financial statements.

In August 2018, the FASB issued ASU2018-15 (ASC Subtopic350-40), Intangibles—Goodwill andOther—Internal-Use Software—Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract. This ASU aligns the accounting for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the accounting for implementation costs incurred to develop or obtaininternal-use software. The Company is required to adopt the guidance in the first quarter of fiscal year 2021.2025. Early adoption is permitted. The Company is in the process of assessing the impact of this ASU on its consolidated financial statements.

Recently Adopted Accounting Pronouncements

In May 2014,December 2019, the FASBFinancial Accounting Standards Board (“FASB”) issued ASU2014-09 2019-12 (ASC Topic 606),Revenue from Contracts with Customers740), and FASB also issued certain interpretive clarifications on this new guidance which outlines a single comprehensive modelSimplifying the Accounting for entities to use in

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Income Taxes. This ASU simplifies accounting for revenue arising from contracts with customersincome taxes by removing certain exceptions to the general principles and supersedes the revenue recognitionamending existing guidance under ASC 605. It also requires entities to disclose both quantitative and qualitative information that enable financial statements users to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers.improve consistent application. This ASU became effective and wasthe Company adopted by the Companyguidance in the quarter ended September 28, 2018 under the modified retrospective approach with a cumulative adjustment to accumulated deficit at the date of adoption. The Company has completed the adoption and implemented policies, processes and controls to support the new standard’s measurement and disclosure requirements.

The Company applied ASC 606 using a modified retrospective transition approach to all contracts that were not completed as of June 29, 2018. Results for reporting periods beginning June 30, 2018 are presented under ASC 606, while prior period amounts were not adjusted and continue to be reported under the historical accounting standard. As a result of the adoption, the Company identified a change in revenue recognition timing on its product sales made to certain retail customers and started to recognize revenue when the Company transfers control to the applicable customers rather than deferring recognition until those customers sell the products. In addition, the Company established accruals for the variable consideration related to customer incentives on these arrangements. On the date of initial adoption, the Company removed the related deferred income on the product sales made to these customers and recorded estimates of the accrual for variable consideration through a cumulative adjustment to accumulated deficit. The cumulative effect of the change to the Company’s Consolidated Balance Sheet from the adoption of ASC 606 was as follows:

(Dollars in millions)

  As of June 29,
2018		   Effect of
adoption of
ASC 606		   As of June 30,
2018		 

Accounts receivable, net

  $1,184   $9   $1,193 

Inventories

  $1,053   $(9)   $1,044 

Accrued expenses

  $598   $(34)   $564 

Accumulated deficit

  $(4,696)   $34   $(4,662) 

The impact of applying the new accounting standard on the Company’s consolidated financial statements for the year ended June 28, 2019 was not material.

In January 2016, the FASB issuedASU 2016-01 (ASCSubtopic 825-10), Financial Instruments—Overall Recognition and Measurement of Financial Assets and Financial Liabilities,as amended by ASU2018-03,Financial Instruments—Overall: Technical Correction and Improvements,issued in February 2018. The amendments in these ASUs require entities to measure all equity investments at fair value with changes recognized through net income. Additionally, the amendments eliminate certain disclosure requirements related to financial instruments measured at amortized cost and add disclosures related to the measurement categories of financial assets and financial liabilities. These ASUs became effective and were adopted by the Company in the quarter ended September 28, 2018. For equity investments without readily determinable fair value, the Company elected the measurement method as cost, less impairments, and adjusted up or down based on observable price changes in orderly transactions for an identical or similar investment in the same issuer.October 1, 2021. The adoption of this guidance had noASU did not have an impact on the Company’s consolidated financial statements and disclosures.

statements.

In January 2017,July 2021, the FASB issuedASU 2017-012021-05 (ASC Topic 805)842), Business Combination: ClarifyingLessors—Certain Leases with Variable Lease Payments. This ASU requires lessors to classify and account for a lease with variable lease payments that do not depend on a reference index or a rate as an operating lease if the Definition oflease would have been classified as a Business. The amendments in this ASU changesales-type lease or a direct financing lease and the definition oflessor would have otherwise recognized a business to assist with evaluating when a set of transferred assets and activities is a business.day-one loss. The Company adopted the guidance in the quarter ended September 28, 2018.October 1, 2021 on a prospective basis. The adoption of this guidance had noASU did not have an impact on the Company’s consolidated financial statements and disclosures.

In May 2017, the FASB issuedASU 2017-09 (ASC Topic 718), Stock Compensation: Scopestatements.


59
Table of Modification Accounting. The amendments in this ASU provide guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. The Company adopted the guidance in the quarter ended September 28, 2018. The adoption of this guidance had no impact on its consolidated financial statements and disclosures.

Seagate Technology public limited company | 2019 Form 10-K | 60

Contents

2.Balance Sheet Information
2.

Balance Sheet Information

Available-for-sale Debt Securities

The following table summarizes, by major type, the fair value and amortized cost of the Company’s investments as of June 28, 2019:

(Dollars in millions)

  Amortized
Cost		   Unrealized
Gain/(Loss)		   Fair
Value		 

Available-for-sale debt securities:

      

Money market funds

  $417   $—     $417 

Time deposits and certificates of deposit

   133    —      133 

Other debt securities

   7    —      7 
  

 

 

   

 

 

   

 

 

 

Total

  $557   $—     $557 
  

 

 

   

 

 

   

 

 

 

Included in Cash and cash equivalents

      $548 

Included in Other current assets

       2 

Included in Other assets, net

       7 
      

 

 

 

Total

      $557 
      

 

 

 

July 1, 2022 and July 2, 2021:

July 1,
2022		July 2,
2021
(Dollars in millions)Amortized
Cost		Unrealized
Gain/(Loss)		Fair
Value		Amortized
Cost		Unrealized
Gain/(Loss)		Fair
Value
Available-for-sale debt securities:   
Money market funds$60 $— $60 $552 $— $552 
Time deposits and certificates of deposit1 — 1 1 — 1 
Other debt securities23 — 23 18 — 18 
Total$84 $— $84 $571 $— $571 
Included in Cash and cash equivalents $59 $551 
Included in Other current assets 2 2 
Included in Other assets, net23 18 
Total $84 $571 
As of June 28, 2019,July 1, 2022 and July 2, 2021, the Company’s Other current assets included $2 million in restricted cash equivalents held as collateral at banks for various performance obligations.

As of June 28, 2019,July 1, 2022 and July 2, 2021, the Company had no materialavailable-for-sale debt securities that had been in a continuous unrealized loss position for a period greater than 12 months. During fiscal year 2022, the Company recorded a $13 million impairment loss relating to available-for-sale debt securities. The Company determined no impairment related to credit losses for available-for-sale debt securities were other-than-temporarily impaired as of June 28, 2019.

July 2, 2021.

The fair value and amortized cost of the Company’s investments classified asavailable-for-sale debt securities at June 28, 2019July 1, 2022 by remaining contractual maturity were as follows:

(Dollars in millions)

  Amortized
Cost		   Fair
Value		 

Due in less than 1 year

  $550   $550 

Due in 1 to 5 years

   3    3 

Due in 6 to 10 years

   —      —   

Thereafter

   4    4 
  

 

 

   

 

 

 

Total

  $557   $557 
  

 

 

   

 

 

 

Seagate Technology public limited company | 2019 Form 10-K | 61

(Dollars in millions)Amortized
Cost		Fair
Value
Due in less than 1 year$61 $61 
Due in 1 to 5 years15 15 
Due in 6 to 10 years— — 
Thereafter8 8 
Total$84 $84 

The following table summarizes, by major type, the fair value and amortized cost of the Company’s investments as of June 29, 2018:

(Dollars in millions)

  Amortized
Cost		   Unrealized
Gain/
(Loss)		   Fair
Value		 

Available-for-sale securities:

      

Money market funds

  $621   $—     $621 

Time deposits and certificates of deposits

   395    —      395 
  

 

 

   

 

 

   

 

 

 

Total

  $1,016   $—     $1,016 
  

 

 

   

 

 

   

 

 

 

Included in Cash and cash equivalents

      $1,012 

Included in Other current assets

       4 
      

 

 

 

Total

      $1,016 
      

 

 

 

As of June 29, 2018, the Company’s Other current assets included $4 million in restricted cash and investments held as collateral at banks for various performance obligations.

As of June 29, 2018, the Company had noavailable-for-sale securities that had been in a continuous unrealized loss position for a period greater than 12 months. The Company determined noavailable-for-sale securities were other-than-temporarily impaired as of June 29, 2018.

Cash, Cash Equivalents and Restricted Cash

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

(Dollars in millions)

  June 28,
2019		   June 29,
2018		   June 30,
2017		   July 1,
2016		 

Cash and cash equivalents

  $2,220   $1,853   $2,539   $1,125 

Restricted cash included in Other current assets

   31    4    4    7 
  

 

 

   

 

 

   

 

 

   

 

 

 

Total cash, cash equivalents and restricted cash shown in the Statements of Cash Flows

  $2,251   $1,857   $2,543   $1,132 
  

 

 

   

 

 

   

 

 

   

 

 

 

(Dollars in millions)July 1,
2022		July 2,
2021		July 3,
2020		June 28,
2019
Cash and cash equivalents$615 $1,209 $1,722 $2,220 
Restricted cash included in Other current assets2 2 2 31 
Total cash, cash equivalents and restricted cash shown in the Statements of Cash Flows$617 $1,211 $1,724 $2,251 
As of June 28, 2019, the Company’s Other current assets included $31 million in restricted cash and cash equivalents in an escrow account for the sale of certain properties and cash equivalents held as collateral at banks for various performance obligations.

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Accounts Receivable, net

The following table provides details of the accounts receivable, net balance sheet item:

(Dollars in millions)

  June 28,
2019		   June 29,
2018		 

Accounts receivable

  $993   $1,188 

Allowances for doubtful accounts

   (4)    (4) 
  

 

 

   

 

 

 

Account receivable, net

  $989   $1,184 
  

 

 

   

 

 

 

Seagate Technology public limited company | 2019 Form 10-K | 62

(Dollars in millions)July 1,
2022		July 2,
2021
Accounts receivable$1,536 $1,162 
Allowances for expected credit losses(4)(4)
Account receivable, net$1,532 $1,158 

Activity in the allowances for doubtfulexpected credit losses accounts is as follows:

(Dollars in millions)Balance at Beginning of PeriodCharges (Credit) to Operations
Deductions (1)
Balance at End of Period
Fiscal year ended July 3, 2020$4 1 — $5 
Fiscal year ended July 2, 2021$5 — (1)$4 
Fiscal year ended July 1, 2022$4 — — $4 

(Dollars in millions)

  Balance at
Beginning of
Period		   Charges
(Credit)  to
Operations		   Deductions (a)   Balance at
End of
Period		 

Fiscal year ended June 30, 2017

  $9    (4)    —     $5 

Fiscal year ended June 29, 2018

  $5    —      (1)   $4 

Fiscal year ended June 28, 2019

  $4    —      —     $4 

(a)

Uncollectible accounts written off, net of recoveries.

(1)    Uncollectible accounts written off, net of recoveries.

In connection with an existing factoring agreement, the Company sells trade receivables to a third party for cash proceeds less a discount. During fiscal year 2022, the Company sold trade receivables without recourse for cash proceeds of $275 million, of which $200 million remained subject to servicing by the Company as of July 1, 2022. During fiscal year 2021, the Company sold trade receivables without recourse for cash proceeds of $183 million, of which none remained subject to servicing by the Company as of July 2, 2021. The discounts on trade receivables sold were not material for fiscal years 2022 and 2021.
Inventories

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

(Dollars in millions)

  June 28,
2019		   June 29,
2018		 

Raw materials and components

  $336   $329 

Work-in-process

   217    347 

Finished goods

   417    377 
  

 

 

   

 

 

 

Total inventories

  $970   $1,053 
  

 

 

   

 

 

 

(Dollars in millions)July 1,
2022		July 2,
2021
Raw materials and components$601 $375 
Work-in-process414 443 
Finished goods550 386 
Total inventories$1,565 $1,204 
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Property, Equipment and Leasehold Improvements, net

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

(Dollars in millions)

  Useful Life
in Years		   June 28,
2019		   June 29,
2018		 

Land and land improvements

    $48   $55 

Equipment

   3 – 5    7,726    7,472 

Buildings and leasehold improvements

   Up to 30    1,795    1,805 

Construction in progress

     266    193 
    

 

 

   

 

 

 
     9,835    9,525 

Less: accumulated depreciation and amortization

     (7,966)    (7,733) 
    

 

 

   

 

 

 

Property, equipment and leasehold improvements, net

    $1,869   $1,792 
    

 

 

   

 

 

 

(Dollars in millions)Useful Life in YearsJuly 1,
2022		July 2,
2021
Land and land improvements $47 $47 
Equipment3 – 78,473 8,250 
Buildings and leasehold improvementsUp to 301,893 1,881 
Construction in progress 246 200 
 10,659 10,378 
Less: accumulated depreciation and amortization (8,420)(8,197)
Property, equipment and leasehold improvements, net $2,239 $2,181 
Depreciation expense, which includes amortization of leasehold improvements, was $464$431 million, $487$368 million and $581$325 million for fiscal years 2019, 20182022, 2021 and 2017,2020, respectively. Interest on borrowings related to eligible capital expenditures is capitalized as part of the cost of the qualified assets and amortized over the estimated useful lives of the assets. During fiscal years 2019, 20182022, 2021 and 2017,2020, the Company capitalized interest of $3 million, $1$5 million and $4$6 million, respectively.

In fiscal year 2019, the Company did not have any material write-offs or accelerated depreciation of fixed assets. In fiscal year 2018, the Company recognized a charge of $7 million from thewrite-off and accelerated depreciation of certain fixed assets, of which $1 million, $4 million and $2 million was recorded to Cost of revenue, Product development and Marketing and administrative, respectively, in the Consolidated Statement of Operations. In fiscal year 2017, the Company determined it would discontinue the use of certain manufacturing property and equipment in the short-term, and that certain other buildings, land and manufacturing property and equipment were permanently impaired. As a result, the Company recognized charges of $72 million in fiscal year 2017 from thewrite-off and accelerated depreciation of these fixed assets, including $35 million impairment on land and buildings classified as held for sale under Other current assets in the Consolidated Balance Sheet. Please refer to Note 9.Fair Valuefor more details.

Seagate Technology public limited company | 2019 Form 10-K | 63

Investment in Debt Security

On May 31, 2018, the Company invested approximately $1.3 billion innon-convertible preferred stock of Toshiba Memory Corporation (“TMC”, formerly known as “K.K. Pangea”), a subsidiary of Toshiba Memory Holdings Corporation (“TMHC”), with a consortium of investors led by Bain Capital Private Equity. The Company’s investment in TMC was subsequently transferred to TMHC. On June 17, 2019, the Company received approximately $1.3 billion in cash from TMHC for the redemption of all the outstanding sharesof non-convertible preferred stock of TMHC held by the Company. The proceeds from the redemption include the original principal and accrued PIK income. As of June 29, 2018, no impairment was identified and the fair value of the investment was determined to approximate its carrying value at amortized cost. In fiscal years 2019 and 2018, the PIK income earned was $61 million and $5 million, respectively.

Accrued Expenses

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

(Dollars in millions)

  June 28,
2019		   June 29,
2018		 

Dividends payable

  $170   $181 

Other accrued expenses

   382    417 
  

 

 

   

 

 

 

Total

  $552   $598 
  

 

 

   

 

 

 

(Dollars in millions)July 1,
2022		July 2,
2021
Dividends payable$147 $153 
Other accrued expenses449 455 
Total$596 $608 
Accumulated Other Comprehensive Income (Loss) (“AOCI”)

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

(Dollars in millions)

  Unrealized
Gains/(Losses)
on Cash Flow
Hedges		   Unrealized
Gains/(Losses)
on  Available-
for-Sale Debt
Securities		   Unrealized
Gains/(Losses)
on Post-
Retirement Plans		   Foreign
Currency
Translation
Adjustments		   Total 

Balance at June 30, 2017

  $—     $—     $(5)   $(12)   $(17) 

Other comprehensive income (loss) before reclassifications

   —      —      1    —      1 

Amounts reclassified from AOCI

   —      —      —      —      —   

Other comprehensive income (loss)

   —      —      1    —      1 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance at June 29, 2018

   —      —      (4)    (12)    (16) 

Other comprehensive income (loss) before reclassifications

   —      —      (16)    (2)    (18) 

Amounts reclassified from AOCI

   —      —      —      —      —   

Other comprehensive income (loss)

   —      —      (16)    (2)    (18) 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance at June 28, 2019

  $—     $—     $(20)   $(14)   $(34) 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Seagate Technology public limited company | 2019 Form 10-K | 64

(Dollars in millions)Unrealized Gains/(Losses) on Cash Flow HedgesUnrealized Gains/(Losses) on Post-Retirement PlansForeign Currency Translation AdjustmentsTotal
Balance at July 3, 2020$(24)$(26)$(16)$(66)
Other comprehensive income before reclassifications15 1 15 31 
Amounts reclassified from AOCI(9)3 — (6)
Other comprehensive income6 4 15 25 
Balance at July 2, 2021(18)(22)(1)(41)
Other comprehensive income before reclassifications48 6 — 54 
Amounts reclassified from AOCI21 2 — 23 
Other comprehensive income69 8 — 77 
Balance at July 1, 2022$51 $(14)$(1)$36 

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3.

Revenue

The following table provides information about disaggregated revenue by sales channel3.Goodwill and geographical region for the Company’s single reportable segment:

   Fiscal Years Ended 

(Dollars in million)

  June 28,
2019		   June 29,
2018		   June 30,
2017		 

Revenues by Channel

      

OEMs

  $7,261   $7,863   $7,478 

Distributors

   1,780    1,906    1,866 

Retailers

   1,349    1,415    1,427 
  

 

 

   

 

 

   

 

 

 

Total

  $10,390   $11,184   $10,771 
  

 

 

   

 

 

   

 

 

 

Revenues by Geography(1)

      

Americas

  $3,310   $3,719   $3,531 

EMEA

   1,965    1,983    2,119 

Asia Pacific

   5,115    5,482    5,121 
  

 

 

   

 

 

   

 

 

 

Total

  $10,390   $11,184   $10,771 
  

 

 

   

 

 

   

 

 

 

(1)

Revenue is attributed to countries based on bill from locations.

4.

Goodwill and Other Intangible Assets

Other Intangible Assets

Goodwill

The changes in the carrying amount of goodwill arewas $1,237 million as follows:

(Dollars in millions)

  Amount 

As of June 30, 2017

  $1,238 

Goodwill acquired

   —   

Goodwill disposed

   (1) 

Foreign currency translation effect

   —   
  

 

 

 

As of June 29, 2018

  $1,237 

Goodwill acquired

   —   

Goodwill disposed

   —   

Foreign currency translation effect

   —   
  

 

 

 

As of June 28, 2019

  $1,237 
  

 

 

 

of July 1, 2022 and July 2, 2021. There were no additions to, disposals of, impairments of or translation adjustments to goodwill in fiscal years 2022, 2021 and 2020.

Other Intangible Assets

Other intangible assets consist primarily of existing technology, customer relationships and trade names acquired in business combinations. Intangibles are amortized on a straight-line basis over the respective estimated useful lives of the assets. Amortization is charged to Operating expenses in the Consolidated Statements of Operations.

In fiscal years 2019, 20182022, 2021 and 2017,2020, amortization expense for other intangible assets was $77$20 million, $111$29 million and $168$53 million, respectively.

Seagate Technology public limited company | 2019 Form 10-K | 65

The carrying value of other intangible assets subject to amortization, excluding fully amortized intangible assets, as of June 28, 2019,July 1, 2022, is set forth in the following table:

(Dollars in millions)

  Gross Carrying
Amount		   Accumulated
Amortization		   Net Carrying
Amount		   Weighted Average
Remaining Useful Life		 

Existing technology

  $201   $(143)   $58    1.9 years 

Customer relationships

   71    (38)    33    3.3 years 

Trade name

   3    (2)    1    1.2 years 

Other intangible assets

   41    (22)    19    2.9 years 
  

 

 

   

 

 

   

 

 

   

Total amortizable other intangible assets

  $316   $(205)   $111    2.5 years 
  

 

 

   

 

 

   

 

 

   

(Dollars in millions)Gross Carrying AmountAccumulated AmortizationNet Carrying AmountWeighted 
Average Remaining 
Useful Life
Existing technology$29 $(24)$5 1.0 Year
Customer relationships71 (68)3 0.2 Year
Other intangible assets8 (7)1 0.8 Year
Total amortizable other intangible assets$108 $(99)$9 0.8 Year
The carrying value of other intangible assets subject to amortization, excluding fully amortized intangible assets, as of June 29, 2018July 2, 2021 is set forth in the following table:

(Dollars in millions)

  Gross Carrying
Amount		   Accumulated
Amortization		   Net Carrying
Amount		   Weighted Average
Remaining Useful Life		 

Existing technology

  $256   $(145)   $111    2.5 years 

Customer relationships

   89    (42)    47    4.0 years 

Trade name

   17    (13)    4    1.3 years 

Other intangible assets

   45    (19)    26    3.0 years 
  

 

 

   

 

 

   

 

 

   

Total amortizable other intangible assets

  $407   $(219)   $188    2.9 years 
  

 

 

   

 

 

   

 

 

   

(Dollars in millions)Gross Carrying AmountAccumulated AmortizationNet Carrying AmountWeighted 
Average Remaining Useful Life
Existing technology$43 $(30)$13 1.8 Years
Customer relationships71 (58)13 1.2 Years
Other intangible assets9 (6)3 1.7 Years
Total amortizable other intangible assets$123 $(94)$29 1.5 Years

As of June 28, 2019,July 1, 2022, expected amortization expense for other intangible assets for eachfiscal year 2023 is $9 million.
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4.Debt
The following table provides details of the next five yearsCompany’s debt as of July 1, 2022 and thereafter isJuly 2, 2021:
(Dollars in millions)July 1,
2022		July 2,
2021
Unsecured Senior Notes(1)
$750 issued on February 3, 2017 at 4.25% due March 1, 2022 (the “2022 Notes”), interest payable semi-annually on March 1 and September 1 of each year, fully repaid on February 1, 2022.
$— $220 
$1,000 issued on May 22, 2013 at 4.75% due June 1, 2023 (the “2023 Notes”), interest payable semi-annually on June 1 and December 1 of each year.
540 541 
$500 issued on February 3, 2017 at 4.875% due March 1, 2024 (the “2024 Notes”), interest payable semi-annually on March 1 and September 1 of each year.
499 499 
$1,000 issued on May 28, 2014 at 4.75% due January 1, 2025 (the “2025 Notes”), interest payable semi-annually on January 1 and July 1 of each year.
479 479 
$700 issued on May 14, 2015 at 4.875% due June 1, 2027 (the “2027 Notes”), interest payable semi-annually on June 1 and December 1 of each year.
504 504 
$500 issued on June 18, 2020 at 4.091% due June 1, 2029 (the “June 2029 Notes”), interest payable semi-annually on June 1 and December 1 of each year.
466 461 
$500 issued on December 8, 2020 at 3.125% due July 15, 2029 (the “July 2029 Notes”), interest payable semi-annually on January 15 and July 15 of each year.
500 500 
$500 issued on June 10, 2020 at 4.125% due January 15, 2031 (the “January 2031 Notes”), interest payable semi-annually on January 15 and July 15 of each year.
500 499 
$500 issued on December 8, 2020 at 3.375% due July 15, 2031 (the “July 2031 Notes”), interest payable semi-annually on January 15 and July 15 of each year.
500 500 
$500 issued on December 2, 2014 at 5.75% due December 1, 2034 (the “2034 Notes”), interest payable semi-annually on June 1 and December 1 of each year.
489 489 
Term Loan
$600 borrowed on October 14, 2021 at London Interbank Offered Rate (“LIBOR”) plus a variable margin ranging from 1.125% to 2.375%, (the “Term Loan A1”), repayable in quarterly installments beginning on December 31, 2022, with a final maturity date of September 16, 2025.
600 — 
$600 borrowed on October 14, 2021 at LIBOR plus a variable margin ranging from 1.25% to 2.5%, (the “Term Loan A2”), repayable in quarterly installments beginning on December 31, 2022, with a final maturity date of July 30, 2027.
600 — 
$500 borrowed on September 17, 2019 at LIBOR, (the “September 2019 Term Loan”), repayable in quarterly installments of 1.25% of the original principal amount beginning on December 31, 2020, with a final maturity date of September 16, 2025, fully repaid on October 14, 2021.
— 481 
5,677 5,173 
Less: unamortized debt issuance costs(31)(34)
Debt, net of debt issuance costs5,646 5,139 
Less: current portion of long-term debt(584)(245)
Long-term debt, less current portion$5,062 $4,894 
(1) All unsecured senior notes are issued by Seagate HDD Cayman, and the obligations under these notes are fully and unconditionally guaranteed, on a senior unsecured basis, by Seagate Technology Unlimited Company (“STUC”) and, pursuant to a supplemental indenture dated as follows:

(Dollars in millions)

  Amount 

2020

  $54 

2021

   29 

2022

   20 

2023

   8 

2024

   —   

Thereafter

   —   
  

 

 

 

Total

  $111 
  

 

 

 

5.

Restructuring and Exit Costs

of May 18, 2021, STX.





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Unsecured Senior Notes
2022 Notes. On February 1, 2022, the entire outstanding principal amount of $220 million was repaid at par, plus accrued and unpaid interest. During fiscal year 2021, $9 million aggregate principal amount of the 2022 Notes were repurchased for cash at a premium to their principal amount, plus accrued and unpaid interest. During fiscal year 2020, $521 million aggregate principal amount of the 2022 Notes were repurchased for cash at a premium to their principal amount, plus accrued and unpaid interest, $250 million and $248 million principal amount of which were repurchased pursuant to cash tender offers for certain senior notes on September 18, 2019 and June 18, 2020, respectively. The Company recorded a loss of $29 million on repurchases during fiscal year 2020, which is included in Other, net in the Company’s Consolidated Statements of Operations.
2023 Notes. During fiscal year 2021, $5 million aggregate principal amount of the 2023 Notes were repurchased for cash at a premium to their principal amount, plus accrued and unpaid interest. During fiscal year 2020, $395 million aggregate principal amount of the 2023 Notes were repurchased for cash at a premium to their principal amount, plus accrued and unpaid interest, $200 million and $178 million principal amount of which was repurchased pursuant to the cash tender offers on September 18, 2019 and June 18, 2020, respectively. The Company recorded a loss of $1 million and $20 millionfor fiscal years 2021 and 2020, which is included in Other, net in the Company’s Consolidated Statement of Operations.
2025 Notes. On September 18, 2019, $170 million principal amount of the 2025 Notes was repurchased at a premium pursuant to the cash tender offers. For fiscal year 2020, the Company recorded a loss of $8 million on repurchase, which is included in Other, net in the Company’s Consolidated Statements of Operations. On June 18, 2020, Seagate HDD Cayman completed an exchange offer in which the principal amount of $271 million of the 2025 Notes was exchanged for the principal amount of $297 million of the July 2029 Notes. The exchange was accounted for as a debt modification with no gain or loss recognized.
2027 Notes. On June 18, 2020, Seagate HDD Cayman completed an exchange offer in which the principal amount of $22$185 million comprisedof the 2027 Notes was exchanged for the principal amount of $203 million of the July 2029 Notes. The exchange was accounted for as a debt modification with no gain or loss recognized.
Credit Agreement
The Company’s subsidiary, Seagate HDD Cayman, entered into a credit agreement on February 20, 2019, which was amended on May 28, 2019, September 16, 2019, January 13, 2021, May 18, 2021 and October 14, 2021 (the “Credit Agreement”).
Prior to the October 14, 2021 amendment, the Credit Agreement provided a term loan facility in an aggregate principal amount of $500 million and a $1.725 billion senior unsecured revolving credit facility (“Revolving Credit Facility”). The September 2019 Term Loan had a final maturity date of September 16, 2025 and the Revolving Credit Facility had a final maturity of February 20, 2024. On September 17, 2019, Seagate HDD Cayman borrowed the $500 million principal amount under the September 2019 Term Loan.
On October 14, 2021, STX and Seagate HDD Cayman entered into an amendment to the Credit Agreement (“Fifth Amendment”), which provides for a new term loan facility in the aggregate principal amount of $1.2 billion that was extended in two tranches of $600 million each (“Term Loan A1” and “Term Loan A2” and together the “Term Loans”). Term Loan A1 and Term Loan A2 were each drawn in full on the closing date for the Fifth Amendment. Term Loan A1 bears interest at a rate of LIBOR plus a variable margin ranging from 1.125% to 2.375% that will be determined based on the corporate credit rating of the Company. Term Loan A1 is repayable in quarterly installments beginning on December 31, 2022 and has a final maturity date of September 16, 2025. Term Loan A2 bears interest at a rate of LIBOR plus a variable margin ranging from 1.25% to 2.5% that will be determined based on the corporate credit rating of the Company. Term Loan A2 is repayable in quarterly installments beginning on December 31, 2022 and has a final maturity date of July 30, 2027. The proceeds of the Terms Loans may be used for, among other things, general corporate purposes.
In addition, pursuant to the Fifth Amendment, the maturity date for the revolving loan commitments under the Revolving Credit Facility was extended until October 14, 2026, the revolving commitments were increased to $1.75 billion and the interest rate margins for the revolving loans were amended to LIBOR plus a variable margin ranging from 1.125% to 2.375% that will be determined based on the corporate credit rating of the Company.
STX and certain of its material subsidiaries, including STUC, fully and unconditionally guarantee both the Revolving Credit Facility and the Term Loans.
The Credit Agreement includes three financial covenants: (1) interest coverage ratio, (2) total leverage ratio and (3) a minimum liquidity amount. The Company was in compliance with the covenants as of July 1, 2022and expects to be in compliance for the next 12 months. As of July 1, 2022, 0 borrowings (including swing line loans) were outstanding and no commitments were utilized for letters of credit issued under the Revolving Credit Facility.
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Future Principal Payments on Long-term Debt
At July 1, 2022, future principal payments on long-term debt were as follows (in millions):
Fiscal YearAmount
2023$585 
2024560 
2025562 
2026563 
2027565 
Thereafter2,880 
Total$5,715 
5.Income Taxes
Income before income taxes consisted of the following:
 Fiscal Years Ended
(Dollars in millions)July 1,
2022		July 2,
2021		July 3,
2020
U.S. $145 $191 $121 
Non-U.S.1,534 1,157 911 
$1,679 $1,348 $1,032 
The provision for income taxes consisted of the following:
 Fiscal Years Ended
(Dollars in millions)July 1,
2022		July 2,
2021		July 3,
2020
Current income tax expense:   
U.S.$4 $— $— 
Non-U.S. 35 38 36 
Total Current39 38 36 
Deferred income tax expense/(benefit):   
U.S.3 8 (18)
Non-U.S. (12)(12)10 
Total Deferred(9)(4)(8)
Provision for income taxes$30 $34 $28 

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The significant components of the Company’s deferred tax assets and liabilities were as follows:
 Fiscal Years Ended
(Dollars in millions)July 1,
2022		July 2,
2021
Deferred tax assets  
Accrued warranty$34 $31 
Inventory carrying value adjustments43 39 
Receivable allowances20 15 
Accrued compensation and benefits73 66 
Depreciation45 47 
Other accruals and deferred items24 25 
Net operating losses671 698 
Tax credit carryforwards650 628 
Other assets1 2 
Gross: Deferred tax assets1,561 1,551 
Less: Valuation allowance(434)(429)
Net: Deferred tax assets1,127 1,122 
Deferred tax liabilities  
Unremitted earnings of certain non-U.S. entities(5)(5)
Acquisition-related Items(2)(5)
Other liabilities(5)(9)
Net: Deferred tax liabilities(12)(19)
Total net deferred tax assets$1,115 $1,103 
At July 1, 2022, the Company recorded $1.1 billion of net deferred tax assets. The realization of most of these deferred tax assets is primarily dependent on the Company’s ability to generate sufficient U.S. and certain non-Irish taxable income in future periods. Although realization is not assured, the Company’s management believes it is more likely than not that these deferred tax assets will be realized. The amount of deferred tax assets considered realizable, however, may increase or decrease in subsequent periods when the Company re-evaluates the underlying basis for its estimates of future U.S. and certain non-Irish taxable income.
The deferred tax asset valuation allowance increased by $5 million in fiscal year 2022.
At July 1, 2022, the Company had U.S. and non-U.S. tax net operating loss carryforwards of approximately $4.3 billion and $120 million, respectively, which will expire at various dates beginning in fiscal year 2023, if not utilized. Net operating loss carryforwards of approximately $26 million are scheduled to expire in fiscal year 2023. At July 1, 2022, the Company had U.S. tax credit carryforwards of $743 million which will expire at various dates beginning in fiscal year 2023 if not utilized.
As of July 1, 2022, approximately $190 million and $88 million of the Company’s total U.S. net operating loss and tax credit carryforwards, respectively, are subject to annual limitations ranging from $1 million to $45 million pursuant to U.S. tax law.
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For purposes of the reconciliation between the provision for income taxes at the statutory rate and the effective tax rate, the Irish statutory rate of 25% was applied as follows:
 Fiscal Years Ended
(Dollars in millions)July 1,
2022		July 2,
2021		July 3,
2020
Provision at statutory rate$420 $337 $258 
Permanent differences5 8 (1)
Valuation allowance7 (2)(16)
Earnings taxed at less than statutory rate(371)(287)(193)
Research credit(26)(27)(27)
Other individually immaterial items(5)5 7 
Provision for income taxes$30 $34 $28 
A substantial portion of the Company's operations in Singapore and Thailand operate under various tax incentive programs, which expire in whole or in part at various dates through 2033. Certain tax incentives may be extended if specific conditions are met. The net impact of these tax incentive programs was to increase the Company's net income by approximately $290 million in fiscal year 2022 ($1.29 per share, diluted), to increase the Company's net income by approximately $226 million in fiscal year 2021 ($0.92 per share, diluted) and to increase the Company’s net income by approximately $206 million in fiscal year 2020 ($0.78 per share, diluted).
The Company analyzes the potential for deferred tax liabilities with respect to the accumulated earnings of foreign subsidiaries on an annual basis. The analysis focuses on the outside basis differences in the stock of the foreign subsidiaries as well as the withholding tax obligations those subsidiaries may have with respect to any distribution. The undistributed earnings for which taxes are not provided are permanently reinvested or can be repatriated without incremental tax liability.
As of July 1, 2022 and July 2, 2021, the Company had approximately $114 million and $108 million, respectively, of unrecognized tax benefits excluding interest and penalties. These amounts, if recognized, would impact the effective tax rate subject to certain future valuation allowance offsets.
The following table summarizes the activities related to the Company’s gross unrecognized tax benefits:
Fiscal Years Ended
(Dollars in millions)July 1,
2022		July 2,
2021		July 3,
2020
Balance of unrecognized tax benefits at the beginning of the year$108 $89 $83 
Gross increase for tax positions of prior years1 7 — 
Gross decrease for tax positions of prior years(1)(1)(1)
Gross increase for tax positions of current year6 15 8 
Gross decrease for tax positions of current year— — — 
Settlements— (1)(1)
Lapse of statutes of limitation— (1)— 
Balance of unrecognized tax benefits at the end of the year$114 $108 $89 
It is the Company’s policy to include interest and penalties related to unrecognized tax benefits in the provision for income taxes on the Consolidated Statements of Operations. Interest and penalties recorded were not material to any periods presented in the Consolidated Statement of Operations. As of July 1, 2022, accrued interest and penalties related to unrecognized tax benefits did not materially change compared to fiscal year 2021.
During the 12 months beginning July 2, 2022, the Company does not expect a gain from salesmaterial change to its unrecognized tax benefits as a result of the expiration of certain statutes of limitation.
The Company is required to file U.S. and non-U.S. income tax returns. The Company is no longer subject to examination of its U.S. income tax returns for years prior to fiscal year 2018 and prior to fiscal year 2011 for non-U.S. income tax returns.
6.Leases
The Company is a property. lessee in several operating leases related to real estate facilities for warehouse and office space.
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The Company’s lease arrangements comprise operating leases with various expiration dates through 2068. The lease term includes the non-cancelable period of the lease, adjusted for options to extend or terminate the lease when it is reasonably certain that an option will be exercised.
Operating lease costs include short-term lease costs and are shown net of immaterial sublease income. The components of lease costs and other information related to leases were as follows:
 Fiscal Years Ended
(Dollars in millions)July 1,
2022		July 2,
2021
Operating lease cost$16 $15 
Variable lease cost4 4
Total lease cost$20 $19 
Operating cash outflows from operating leases$20 $19 
July 1,
2022		July 2,
2021
Weighted-average remaining lease term9.3 years7.2 years
Weighted-average discount rate6.40 %6.02 %
ROU assets and lease liabilities are included on the Company’s Consolidated Balance Sheet as follows:
(Dollars in millions)Balance Sheet LocationJuly 1,
2022		July 2,
2021
ROU assetsOther assets, net$94 $97 
Current lease liabilitiesAccrued expenses14 15
Non-current lease liabilitiesOther non-current liabilities36 39

At July 1, 2022, future lease payments included in the measurement of lease liabilities were as follows (in millions):

Fiscal YearAmount
2023$14 
202410 
20258 
20266 
20274 
Thereafter16 
Total lease payments58 
Less: imputed interest(8)
Present value of lease liabilities$50 

7.Restructuring and Exit Costs
During fiscal years 20182022, 2021 and 20172020, the Company recorded restructuring charges of $89$3 million, $8 million and $178$82 million, respectively, comprised primarily of charges related to workforce reduction costs and facilities and other exit costs associated with the restructuring of its workforce. The Company’s significant restructuring plans are described below. All restructuring charges are reported in Restructuring and other, net on the Consolidated Statements of Operations.

December 2017

June 2020 Plan — - On December 8, 2017,June 1, 2020, the Company committed to a restructuring plan (the “December 2017“June 2020 Plan”) consistent with its long-term strategy to drive operational efficiencies, reduce its cost structure.structure and invest in future opportunities. The December 2017June 2020 Plan included reducing the Company’s globalits headcount worldwide by approximately 500 employees. The December 2017 Plan was substantially completed by the end of fiscal year 2018.

July 2017 Plan — On July 25, 2017, the Company committed to a restructuring plan (the “July 2017 Plan”) to reduce its cost structure. The July 2017 Plan included reducing the Company’s global headcount by approximately 600 employees. The July 2017June 2020 Plan was substantially completed during fiscal year 2018.

Seagate Technology public limited company | 2019 Form 10-K | 66

March 2017 Plan — On March 9, 2017, the Company committed to a restructuring plan (the “March 2017 Plan”) in connection with the continued consolidation of its global footprint. The Company closed its design center in Korea, resulting in the reduction of the Company’s headcount by approximately 300 employees. The March 2017 Plan was substantially completed by the endfirst quarter of fiscal year 2017.

July 2016 Plan— On July 11, 2016, the Company committed to a restructuring plan (the “July 2016 Plan”) for continued consolidation2021.

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Table of its global footprint across Asia, EMEA and the Americas. The July 2016 Plan included reducing worldwide headcount by approximately 6,500 employees. The July 2016 Plan was substantially completed during fiscal year 2018.

Contents

The following table summarizes the Company’s restructuring activities under all of the Company’s active restructuring plans for fiscal years 2019, 20182022, 2021 and 2017:

  December 2017 Plan  July 2017 Plan  March 2017 Plan  July 2016 Plan  Other Plans    

(Dollars in millions)

 Workforce
Reduction
Costs		  Facilities
and Other
Exit Costs		  Workforce
Reduction
Costs		  Facilities
and Other
Exit Costs		  Workforce
Reduction
Costs		  Facilities
and Other
Exit Costs		  Workforce
Reduction
Costs		  Facilities
and Other
Exit Costs		  Workforce
Reduction
Costs		  Facilities
and Other
Exit Costs		  Total 

Accrual balances at July 1, 2016

 $—    $—    $—    $—    $—    $—    $—    $—    $50  $13  $63 

Restructuring charges

  —     —     —     —     28   3   72   20   31   13   167 

Cash payments

  —     —     —     —     (29)   (3)   (57)   (18)   (74)   (17)   (198) 

Adjustments

  —     —     —     —     1   —     7   —     (1)   4   11 
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Accrual balances at June 30, 2017

  —     —     —     —     —     —     22   2   6   13   43 

Restructuring charges

  28   6   38   4   —     —     1   15   13   —     105 

Cash payments

  (21)   (2)   (37)   (3)   (1)   —     (23)   (16)   (9)   (3)   (115) 

Adjustments

  (2)   —     (1)   —     2   —     2   (1)   1   8   9 
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Accrual balances at June 29, 2018

  5   4   —     1   1   —     2   —     11   18   42 

Restructuring charges

  —     3   —     —     —     —     —     6   41   4   54 

Cash payments

  (5)   (5)   —     —     (1)   —     (1)   (6)   (41)   (6)   (65) 

Adjustments

  —     (1)   —     (1)   —     —     (1)   —     2   —     (1) 
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Accrual balances at June 28, 2019

  —     1   —     —     —     —     —     —     13   16   30 

Total costs incurred to date as of June 28, 2019

 $26  $8  $37  $3  $31  $3  $81  $40  $283  $63  $575 
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Total expected costs to be incurred as of June 28, 2019

 $—    $—    $—    $—    $—    $—    $—    $—    $1  $—    $1 
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Of the2020:

June 2020 PlanOther Plans
(Dollars in millions)Workforce Reduction CostsFacilities and Other Exit CostsWorkforce Reduction CostsFacilities and Other Exit CostsTotal
Accrual balances at June 28, 2019$— $— $13 $17 $30 
Lease adoption adjustment— — — (11)(11)
Restructuring charges56 2 26 2 86 
Cash payments(18)— (30)(5)(53)
Adjustments— — (4)— (4)
Accrual balances at July 3, 202038 2 5 3 48 
Restructuring charges— — 6 8 14 
Cash payments(37)(1)(10)(5)(53)
Adjustments— — — (1)(1)
Accrual balances at July 2, 20211 1 1 5 8 
Restructuring charges— — 2 1 3 
Cash payments(1)(1)(3)(1)(6)
Adjustments— — — — — 
Accrual balances at July 1, 2022$— $— $— $5 $5 
Total costs incurred to date as of July 1, 2022$56 $2 $140 $76 $274 
Total expected costs to be incurred as of July 1, 2022$— $— $— $1 $1 
The accrued restructuring balance of $30$5 million at June 28, 2019, $16 millionJuly 1, 2022 is included in Accrued expenses and $14 million is included in Othernon-current liabilities in the Company’s Consolidated Balance Sheet. Of the accrued restructuring balance of $42 million at June 29, 2018, $26 million is included in Accrued expenses and $16 million is included in Othernon-current liabilities in the Company’s Consolidated Balance Sheet.

During fiscal years 2019 and 2018,year 2021, the Company sold certain properties, which were previously classified as assets held for sale and recognized a gain of approximately $78 million and $25 million, respectively. The Company also recorded an impairment charge of $3 million on its held forfrom the sale landof a certain property and building during fiscal year 2019. Thea gain and impairment charge were includedof $2 million from termination of an operating lease, which are reported in Restructuring and other, net inon the Company’s Consolidated Statements of Operations. Please refer to Note 9.—Fair Value for more details.

6.

Debt

Revolving Credit Facility

On February 20, 2019, the Company terminated its senior unsecured revolving credit facility scheduled to expire on January 15, 2020, under which the Company was able to draw up to $700 million. Upon termination, the Company and its subsidiary Seagate HDD Cayman entered into a new credit agreement (the “2019 Revolving Credit Facility”) which provides the

Seagate Technology public limited company | 2019 Form 10-K | 67

Company with a $1.3 billion senior unsecured revolving credit facility. The 2019 Revolving Credit Facility has a final maturity of February 20, 2024. The loans made under the 2019 Revolving Credit Facility will bear interest at a rate of LIBOR plus a variable margin that will be determined based on the corporate credit rating of the Company. The Company and certain other material subsidiaries of the Company fully and unconditionally guarantee the revolving credit facility. On May 28, 2019, the Company increased the 2019 Revolving Credit Facility from $1.3 billion to $1.5 billion primarily through the addition of two lenders under the facility. The 2019 Revolving Credit Facility also allows the Company to increase the facility by an additional $100 million, provided that (i) there has been, and will be after giving effect to such increase, no default, (ii) the increase is at least $25 million and (iii) the existing commitments under the facility receive 0.50% most favored nation protection. An aggregate amount of up to $75 million of the facility is available for the issuance of letters of credit, and an aggregate amount of up to $50 million of the facility is also available for swing line loans.

The 2019 Revolving Credit Facility includes three financial covenants: (1) interest coverage ratio, (2) total leverage ratio and (3) a minimum liquidity amount. The Company was in compliance with the covenants as of June 28, 2019 and expects to be in compliance for the next 12 months.

As of June 28, 2019, no borrowings were drawn and no letters of credit or swing line loans have been utilized under the 2019 Revolving Credit Facility.

Long-Term Debt

$800 million Aggregate Principal Amount of 3.75% Senior Notes due November 2018 (the “2018 Notes”).On November 5, 2013, Seagate HDD Cayman, issued $800 million in aggregate principal amount of 3.75% Senior Notes. The Notes were fully and unconditionally guaranteed by the Company on a senior unsecured basis. The interest on the Notes was payable semi-annually on May 15 and November 15 of each year. During fiscal years 2018 and 2017, the Company repurchased $211 million and $90 million, respectively, aggregate principal amount of the 2018 Notes for cash at a premium to their principal amount, plus accrued and unpaid interest. For fiscal years 2018 and 2017 the Company recorded a loss on the repurchase of approximately $4 million and $3 million, respectively, which is included in Other, net in the Company’s Consolidated Statements of Operations. On November 15, 2018, the 2018 Notes matured and the Company repaid the entire outstanding principal amount of $499 million, plus accrued and unpaid interest.

$600 million Aggregate Principal Amount of 7.00% Senior Notes due November 2021 (the “2021 Notes”). On May 18, 2011, the Company’s subsidiary, Seagate HDD Cayman, completed the sale of $600 million aggregate principal amount of the 2021 Notes, in a private placement exempt from the registration requirements of the Securities Act of 1933, as amended. The obligations under the 2021 Notes were fully and unconditionally guaranteed, on a senior unsecured basis, by the Company. The interest on the 2021 Notes was payable semi-annually on January 1 and July 1 of each year. During fiscal year 2017, the 2021 Notes were fully extinguished through redemption for cash at a premium to their principal amount of $158 million, plus accrued and unpaid interest. For fiscal year 2017, the Company recorded a loss on the redemption of approximately $5 million, which was included in Other, net in the Company’s Consolidated Statement of Operations.

$750 million Aggregate Principal Amount of4.25% Senior Notes due March 2022 (the “2022 Notes”).On February 3, 2017, Seagate HDD Cayman issued, in a private placement, $750 million in aggregate principal amount of 4.25% Senior Notes which will mature on March 1, 2022. The interest on the 2022 Notes is payable semi-annually on March 1 and September 1 of each year, commencing on September 1, 2017. At any time before February 1, 2022, Seagate HDD Cayman may redeem some or all of the 2022 Notes at a “make whole” redemption price, plus accrued and unpaid interest, if any. The ‘‘make-whole’’ redemption price will be equal to (1) 100% of the principal amount of the 2022 Notes redeemed, plus (2) the excess, if any, of (a) the sum of the present values of the remaining scheduled payments of principal and interest on the 2022 Notes being redeemed, discounted to the redemption date on a semi-annual basis at a rate equal to the sum of the Treasury Rate (as defined in the relevant indenture) plus 40 basis points, minus accrued and unpaid interest, if any, on the 2022 Notes being redeemed to, but excluding, the redemption date over (b) the principal amount of the 2022 Notes being redeemed, plus (3) accrued and unpaid interest, if any, on the 2022 Notes being redeemed to, but excluding, the redemption date. The issuer under the 2022 Notes is Seagate HDD Cayman, and the obligations under the 2022 Notes are fully and unconditionally guaranteed, on a senior unsecured basis, by the Company.

$1 billionAggregate Principal Amount of4.75% Senior Notes due June 2023 (the “2023 Notes”).OnMay 22, 2013, Seagate HDD Cayman, issued $1 billion in aggregate principal amount of 4.75% Senior Notes, which will mature on June 1,

Seagate Technology public limited company | 2019 Form 10-K | 68

8.Derivative Financial Instruments

2023, in a private placement. The obligations under the 2023 Notes are fully and unconditionally guaranteed, on a senior unsecured basis, by the Company. The interest on the 2023 Notes is payable semi-annually on June 1 and December 1 of each year. The 2023 Notes are redeemable at the option of the Company in whole or in part, on not less than 30, nor more than 60 days’ notice, at a “make-whole” premium redemption price. The “make-whole” redemption price will be equal to the greater of (1) 100% of the principal amount of the notes being redeemed, or (2) the sum of the present values of the remaining scheduled payments of principal and interest on the 2023 Notes being redeemed, discounted at the redemption date on a semi-annual basis at a rate equal to the sum of the applicable Treasury Rate plus 50 basis points. Accrued and unpaid interest, if any, will be paid to, but excluding, the redemption date. During fiscal years 2019 and 2017, the Company repurchased $10 million and $39 million, respectively, aggregate principal amount of its 2023 Notes for cash at a premium to their principal amount, plus accrued and unpaid interest. The loss recorded on the repurchases in fiscal years 2019 and 2017 were immaterial, which is included in Other, net in the Company’s Consolidated Statement of Operations.

$500 million Aggregate Principal Amount of 4.875% Senior Notes due March 2024 (the “2024 Notes”).On February 3, 2017, Seagate HDD Cayman issued, in a private placement, $500 million in aggregate principal amount of 4.875% Senior Notes which will mature on March 1, 2024. The interest on the 2024 Notes is payable semi-annually on March 1 and September 1 of each year, commencing on September 1, 2017. At any time before January 1, 2024, Seagate HDD Cayman may redeem some or all of the 2024 Notes at a “make whole” redemption price, plus accrued and unpaid interest, if any. The ‘‘make-whole’’ redemption price will be equal to (1) 100% of the principal amount of the 2024 Notes redeemed, plus (2) the excess, if any, of (a) the sum of the present values of the remaining scheduled payments of principal and interest on the 2024 Notes being redeemed, discounted to the redemption date on a semi-annual basis at a rate equal to the sum of the Treasury Rate plus 45 basis points, minus accrued and unpaid interest, if any, on the 2024 Notes being redeemed to, but excluding, the redemption date over (b) the principal amount of the 2024 Notes being redeemed, plus (3) accrued and unpaid interest, if any, on the 2024 Notes being redeemed to, but excluding, the redemption date. The issuer under the 2024 Notes is Seagate HDD Cayman, and the obligations under the 2024 Notes are fully and unconditionally guaranteed, on a senior unsecured basis, by the Company.

$1 billion Aggregate Principal amount of 4.75% Senior Notes due January 2025 (the “2025 Notes”). On May 28, 2014, Seagate HDD Cayman issued, in a private placement, $1 billion in aggregate principal amount of 4.75% Senior Notes due 2025, which will mature on January 1, 2025. The interest on the Notes will be payable in cash semiannually on January 1 and July 1 of each year, commencing on January 1, 2015. At any time, upon not less than 30 nor more than 60 days’ notice, Seagate HDD may redeem some or all of the Notes at a ‘‘make-whole’’ redemption price. The ‘‘make-whole’’ redemption price will be equal to the greater of (1) 100% of the principal amount of the Notes redeemed, and (2) the sum of the present values of the remaining scheduled payments of principal and interest on the Notes being redeemed, discounted to the redemption date on a semi-annual basis at a rate equal to the sum of the Treasury Rate plus 50 basis points. Accrued and unpaid interest, if any, will be paid to, but excluding, the redemption date. The Notes are fully and unconditionally guaranteed by the Company on a senior unsecured basis. During fiscal years 2019 and 2017, the Company repurchased $55 million and $20 million, respectively, aggregate principal amount of the 2025 Notes for cash at a discount to their principal amount, plus accrued and unpaid interest. For fiscal years 2019 and 2017 the Company recorded a gain on the repurchase of approximately $1 million and $1 million, respectively, which is included in Other, net in the Company’s Consolidated Statements of Operations.

$700 million Aggregate Principal Amount of 4.875% Senior Notes due June, 2027 (the “2027 Notes”). On May 14, 2015, Seagate HDD Cayman issued, in a private placement, $700 million in aggregate principal amount of 4.875% Senior Notes, which will mature on June 1, 2027. The interest on the Notes is payable semi-annually on June 1 and December 1 of each year, commencing on December 1, 2015. At any time before March 1, 2027, Seagate HDD Cayman may redeem some or all of the Notes at a “make-whole” redemption price. The ‘‘make-whole’’ redemption price will be equal to (1) 100% of the principal amount of the Notes redeemed, plus (2) the excess, if any of (x) the sum of the present values of the remaining scheduled payments of principal and interest on the Notes being redeemed, discounted to the redemption date on a semi-annual basis at a rate equal to the sum of the Treasury Rate plus 40 basis points, minus accrued and unpaid interest, if any, on the Notes being redeemed to, but excluding, the redemption date over (y) the principal amount of the Notes being redeemed, plus (3) accrued and unpaid interest, if any, on the Notes being redeemed to, but excluding, the redemption date. At any time on or after March 1, 2027, the Company may redeem some or all of the Notes at a redemption price equal to 100% of the principal amount of the Notes redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date. The issuer under the 2027 Notes is Seagate HDD Cayman, and the obligations under the 2027 Notes are fully and unconditionally

Seagate Technology public limited company | 2019 Form 10-K | 69

guaranteed, on a senior unsecured basis, by the Company. During fiscal year 2017, the Company repurchased $4 million aggregate principal amount of the 2027 Notes for cash at a discount to their principal amount, plus accrued and unpaid interest. The Company recorded an immaterial gain on the repurchase, which is included in Other, net in the Company’s Consolidated Statements of Operations. During fiscal year 2019, the Company repurchased $6 million aggregate principal amount of the 2027 Notes for cash at a discount to their principal amount, plus accrued and unpaid interest. The Company recorded an immaterial gain on the repurchase, which is included in Other, net in the Company’s Consolidated Statements of Operations.

$500 million Aggregate Principal Amount of 5.75% Senior Notes due December, 2034 (the “2034 Notes”). On December 2, 2014, Seagate HDD Cayman issued, in a private placement, $500 million in aggregate principal amount of 5.75% Senior Notes, which will mature on December 1, 2034. The interest on the Notes is payable semi-annually on June 1 and December 1 of each year, commencing on June 1, 2015. At any time before June 1, 2034, Seagate HDD Cayman may redeem some or all of the Notes at a “make-whole” redemption price. The ‘‘make-whole’’ redemption price will be equal to (1) 100% of the principal amount of the Notes redeemed, plus (2) the excess, if any of (x) the sum of the present values of the remaining scheduled payments of principal and interest on the Notes being redeemed, discounted to the redemption date on a semi-annual basis at a rate equal to the sum of the Treasury Rate plus 50 basis points, minus accrued and unpaid interest, if any, on the Notes being redeemed to, but excluding, the redemption date over (y) the principal amount of the Notes being redeemed, plus (3) accrued and unpaid interest, if any, on the Notes being redeemed to, but excluding, the redemption date. At any time on or after June 1, 2034, the Company may redeem some or all of the Notes at a redemption price equal to 100% of the principal amount of the Notes redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date. The issuer under the 2034 Notes is Seagate HDD Cayman, and the obligations under the 2034 Notes are fully and unconditionally guaranteed, on a senior unsecured basis, by the Company. During fiscal year 2016, the Company repurchased $10 million aggregate principal amount of its 2034 Notes for cash at a discount to their principal amount, plus accrued and unpaid interest. The Company recorded a gain on the repurchase of approximately $3 million, which was included in Other, net in the Company’s Consolidated Statement of Operations.

At June 28, 2019, future Principal payments on long-term debt were as follows (in millions):

Fiscal Year

  Amount 

2020

  $—   

2021

   —   

2022

   750 

2023

   941 

2024

   500 

Thereafter

   2,100 
  

 

 

 

Total

  $4,291 
  

 

 

 

7.

Income Taxes

Income (loss) before income taxes consisted of the following:

   Fiscal Years Ended 

(Dollars in millions)

  June 28,
2019		   June 29,
2018		   June 30,
2017		 

U.S.

  $275   $(29)   $(22) 

Non-U.S.

   1,097    1,447    837 
  

 

 

   

 

 

   

 

 

 
  $1,372   $1,418   $815 
  

 

 

   

 

 

   

 

 

 

Seagate Technology public limited company | 2019 Form 10-K | 70

The (benefit) provision for income taxes consisted of the following:

   Fiscal Years Ended 

(Dollars in millions)

  June 28,
2019		   June 29,
2018		   June 30,
2017		 

Current income tax expense:

      

U.S. Federal

  $—     $—     $—   

U.S. State

   —      5    1 

Non-U.S.

   45    38    39 
  

 

 

   

 

 

   

 

 

 

Total Current

   45    43    40 
  

 

 

   

 

 

   

 

 

 

Deferred income tax (benefit) expense:

      

U.S. Federal

   (690)    201    (5) 

U.S. State

   12    —      —   

Non-U.S.

   (7)    (8)    8 
  

 

 

   

 

 

   

 

 

 

Total Deferred

   (685)    193    3 
  

 

 

   

 

 

   

 

 

 

(Benefit) provision for income taxes

  $(640)   $236   $43 
  

 

 

   

 

 

   

 

 

 

On December 22, 2017, the Tax Act was enacted into law in the United States. The Tax Act significantly revised U.S. corporate income tax law by, among other things, lowering U.S. corporate income tax rates from 35% to 21%, implementing a territorial tax system and imposing aone-time transition tax on deemed repatriated earnings ofnon-U.S. subsidiaries.

The U.S. tax law changes, including limitations on various business deductions such as executive compensation under Internal Revenue Code §162(m), will not materially impact the Company’s current tax expense in the short-term due to the Company’s large net operating loss and tax credit carryovers. The Tax Act’s new international rules, including Global IntangibleLow-Taxed Income (“GILTI”), Foreign Derived Intangible Income (“FDII”) and Base Erosion Anti-Avoidance Tax (“BEAT”), are effective beginning in fiscal year 2019. For fiscal year 2019, the Company has included the effects of the Tax Act in its financial statements and has concluded the impact is not material.

As of the fiscal quarter ended September 28, 2018, pursuant to SEC Staff Accounting Bulletin (“SAB”) 118 (regarding the application of ASC 740 associated with the enactment of the Tax Act), the Company had considered SAB 118 and concluded its accounting under ASC 740 for the provisions of the Tax Act was complete. There were no adjustments deemed necessary in fiscal year 2019.

Seagate Technology public limited company | 2019 Form 10-K | 71

The significant components of the Company’s deferred tax assets and liabilities were as follows (in millions):

(Dollars in millions)

  Fiscal Years Ended 
  June 28,
2019		   June 29,
2018		 
Deferred tax assets    

Accrued warranty

  $46   $55 

Inventory carrying value adjustments

   34    30 

Receivable allowances

   10    13 

Accrued compensation and benefits

   53    64 

Depreciation

   89    96 

Restructuring accruals

   4    5 

Other accruals and deferred items

   15    34 

Net operating losses

   743    812 

Tax credit carryforwards

   582    549 

Other assets

   7    10 
  

 

 

   

 

 

 

Gross: Deferred tax assets

   1,583    1,668 

Less: Valuation allowance

   (460)    (1,221) 
  

 

 

   

 

 

 

Net: Deferred tax assets

   1,123    447 
  

 

 

   

 

 

 

Deferred tax liabilities

    

Unremitted earnings of certainnon-U.S. entities

   (16)    (7) 

Acquisition-related items

   (13)    (30) 
  

 

 

   

 

 

 

Net: Deferred tax liabilities

   (29)    (37) 
  

 

 

   

 

 

 

Total net deferred tax assets

  $1,094   $410 
  

 

 

   

 

 

 

At June 28, 2019, the Company recorded $1.1 billion of net deferred tax assets. The realization of most of these deferred tax assets is primarily dependent on the Company’s ability to generate sufficient U.S. and certainnon-U.S. taxable income in future periods. Although realization is not assured, the Company’s management believes it is more likely than not that these deferred tax assets will be realized. The amount of deferred tax assets considered realizable, however, may increase or decrease in subsequent periods when the Companyre-evaluates the underlying basis for its estimates of future U.S. and certainnon-U.S. taxable income.

The deferred tax asset valuation allowance decreased by $761 million in fiscal year 2019. The decrease in valuation allowance during fiscal year 2019 was primarily related to a valuation allowance release driven by improvements in the Company’s profitability outlook in the U.S., including its efforts to structurally and operationally align its EDS business with the rest of the Company. The Company continues to maintain a valuation allowance related to specific net deferred tax assets where it is not more likely than not that the deferred tax assets will be realized. This includes certain U.S. federal, U.S. state andnon-U.S. tax attributes that have limited lives, or, indefinite lived deferred tax assets that the Company does not expect to utilize in the foreseeable future.

At June 28, 2019, the Company had U.S. federal, U.S. state andnon-U.S. tax net operating loss carryforwards of approximately $3.1 billion, $1.8 billion and $43.5 million, respectively, which will expire at various dates beginning in fiscal year 2020, if not utilized. Net operating loss carryforwards of approximately $42 million are scheduled to expire in fiscal year 2020. At June 28, 2019, the Company had U.S. federal and state tax credit carryforwards of $533 million and $143 million, respectively, which will expire at various dates beginning in fiscal year 2020 if not utilized.

Seagate Technology public limited company | 2019 Form 10-K | 72

As of June 28, 2019, approximately $373 million and $98 million of the Company’s total U.S. net operating loss and tax credit carryforwards, respectively, are subject to annual limitations ranging from $1 million to $45 million pursuant to U.S. tax law.

For purposes of the reconciliation between the (benefit) provision for income taxes at the statutory rate and the effective tax rate, the Irish statutory rate of 25% was applied as follows:

   Fiscal Years Ended 

(Dollars in millions)

  June 28,
2019		   June 29,
2018		   June 30,
2017		 

Provision at statutory rate

  $343   $355   $204 

Permanent differences

   3    (2)    19 

Effect of U.S. corporate tax rate change

   —      524    —   

Valuation allowance

   (742)    (297)    2 

Non-U.S. losses with no tax benefits

   —      —      17 

Earnings taxed at other than statutory rate

   (234)    (317)    (185) 

Research credit

   (38)    (25)    (14) 

Tax expense (benefit) related to intercompany transactions

   23    —      (2) 

Other individually immaterial items

   5    (2)    2 
  

 

 

   

 

 

   

 

 

 

(Benefit) provision for income taxes

  $(640)   $236   $43 
  

 

 

   

 

 

   

 

 

 

A substantial portion of the Company’s operations in Malaysia, Singapore and Thailand operate under various tax incentive programs, which expire in whole or in part at various dates through 2025. Certain tax incentives may be extended if specific conditions are met. The net impact of these tax incentive programs was to increase the Company’s net income by approximately $194 million in fiscal year 2019 ($0.68 per share, diluted), to increase the Company’s net income by approximately $269 million in fiscal year 2018 ($0.92 per share, diluted) and to increase the Company’s net income by approximately $163 million in fiscal year 2017 ($0.54 per share, diluted).

The Company consists of an Irish tax resident parent holding company with various U.S. andnon-U.S. subsidiaries that operate in multiplenon-Irish taxing jurisdictions. The amount of temporary differences (including undistributed earnings) related to outside basis differences in the stock ofnon-Irish resident subsidiaries considered indefinitely reinvested outside of Ireland for which Irish income taxes have not been provided as of June 28, 2019, was approximately $2.3 billion. If such amounts were remitted to Ireland as a dividend, it is likely that tax at 25%, or approximately $575 million would result.

As of June 28, 2019 and June 29, 2018, the Company had approximately $83 million and $60 million, respectively, of unrecognized tax benefits excluding interest and penalties. These amounts, if recognized, would impact the effective tax rate subject to certain future valuation allowance offsets.

Seagate Technology public limited company | 2019 Form 10-K | 73

The following table summarizes the activity related to the Company’s gross unrecognized tax benefits:

   Fiscal Years Ended 

(Dollars in millions)

  June 28,
2019		   June 29,
2018		   June 30,
2017		 

Balance of unrecognized tax benefits at the beginning of the year

  $60   $74   $76 

Gross increase for tax positions of prior years

   22    2    2 

Gross decrease for tax positions of prior years

   (9)    (3)    (7) 

Gross increase for tax positions of current year

   16    7    16 

Gross decrease for tax positions of current year

   —      —      —   

Settlements

   —      —      —   

Lapse of statutes of limitation

   (6)    (20)    (13) 

Non-U.S. exchange gain

   —      —      —   
  

 

 

   

 

 

   

 

 

 

Balance of unrecognized tax benefits at the end of the year

  $83   $60   $74 
  

 

 

   

 

 

   

 

 

 

It is the Company’s policy to include interest and penalties related to unrecognized tax benefits in the provision for income taxes on the Consolidated Statements of Operations. During fiscal years 2019 and 2018, the Company recognized net income tax benefit for interest and penalties of $2 million, as compared to net tax benefit of $1 million during fiscal year 2017. As of June 28, 2019, the Company had $1 million of accrued interest and penalties related to unrecognized tax benefits compared to $2 million in fiscal year 2018.

During the 12 months beginning June 29, 2019, the Company expects that its unrecognized tax benefits could be reduced by less than $1 million as a result of the expiration of certain statutes of limitation.

The Company is required to file U.S. federal, U.S. state andnon-U.S. income tax returns. The Company is no longer subject to examination of its U.S. federal income tax returns for years prior to fiscal year 2016. With respect to U.S. state andnon-U.S. income tax returns, the Company is generally no longer subject to tax examination for years ending prior to fiscal year 2008.

8.

Derivative Financial Instruments

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

The Company has entered into certain interest rate swap agreements to convert the variable interest rate on its Term Loans to fixed interest rates. The objective of the interest rate swap agreements is to eliminate the variability of interest payment cash flows associated with the variable interest rate under the Term Loans. The Company designated the interest rate swaps as cash flow hedges. As of July 1, 2022, the aggregate notional amount of the Company’s interest-rate swap contracts was $1.2 billion, of which $600 million will mature in September 2025 and $600 million will mature in July 2027.
The Company’s accounting policies for these instruments are based on whether the instruments are classified as designatedor non-designated hedging instruments. The Company records all derivatives in theon its Consolidated Balance Sheets at fair value. The changes in the fair value of highly effective designated cash flow hedges are recorded in Accumulated other comprehensive lossincome until the hedged item is recognized in earnings. Derivatives that are not designated as hedging instruments or are not assessed to be highly effective are adjusted to fair value through earnings. The amount of net unrealized gain and loss on cash flow hedges was not material$51 million and net unrealized loss was $18 million as of June 28, 2019July 1, 2022 and as of July 2, 2021, respectively. As of July 1, 2022, the amount of existing net unrealized gain ongains related to cash flow hedges was less than $1recorded in Accumulated other comprehensive income included a net gain of $8 million as of June 29, 2018.

that is expected to be reclassified to earnings within twelve months.

The Companyde-designates its cash flow hedges when the forecasted hedged transactions affectsaffect earnings or it is probable the forecasted hedged transactions will not occur in the initially identified time period. At such time, the associated gains and losses deferred in Accumulated other comprehensive lossincome on the Company’s Consolidated Balance Sheets are reclassified immediately into earnings and any subsequent changes in the fair value of such derivative instruments are immediately reflected in earnings.
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The Company did not recognize any material amountsrecognized a net loss of $11 million and $10 million in Cost of revenue and Interest expense, respectively related to the loss of hedge designation on discontinued cash flow hedges during fiscal years 2019, 2018year 2022. The Company recognized a net gain of $14 million in Cost of revenue and 2017.

a net loss of $7 million in Interest expense related to the loss of hedge designation on discontinued cash flow hedges during fiscal year 2021. The Company recognized a net loss of $3 million in Other expense, net related to the loss of hedge designation on discontinued cash flow hedges during the fiscal year 2020.

Other derivatives not designated as hedging instruments consist of foreign currency forward exchange contracts that the Company uses to hedge the foreign currency exposure on the investment in debt security and forecasted expenditures

Seagate Technology public limited company | 2019 Form 10-K | 74

denominated in currencycurrencies other than the U.S. dollar. The Company recognizes gains and losses on these contracts, as well as the related costs in Other, net on its Consolidated StatementStatements of Operations along with foreign currency gains and losses on investment in debt security, deferred gains of derivatives in Other current assets and deferred losses of derivatives in Accrued expenses on its Consolidated Balance Sheet.

Operations.

The following table showstables show the total notional value of the Company’s outstanding foreign currency forward exchange contracts as of June 28, 2019.July 1, 2022 and July 2, 2021. All theseof the foreign currency forward exchange contracts mature within 12 months.

   As of June 28, 2019 

(Dollars in millions)

  Contracts
Designated as
Hedges		   Contracts Not
Designated as
Hedges		 

Singapore Dollar

  $60   $40 

Chinese Renminbi

   79    20 

British Pound Sterling

   6    12 
  

 

 

   

 

 

 
  $145   $72 
  

 

 

   

 

 

 

The following table shows the total notional value of the Company’s outstanding foreign currency forward exchange contracts as of June 29, 2018.

   As of June 29, 2018 

(Dollars in millions)

  Contracts
Designated as
Hedges		   Contracts Not
Designated as
Hedges		 

Japanese Yen (a)

  $66   $1,310 

(a)

Pertains to our investment in TMHC.

As of July 1, 2022
(Dollars in millions)Contracts Designated as HedgesContracts Not Designated as Hedges
Singapore Dollar$178 $52 
Thai Baht133 35 
Chinese Renminbi92 24 
British Pound Sterling64 15 
$467 $126 

As of July 2, 2021
(Dollars in millions)Contracts Designated as HedgesContracts Not Designated as Hedges
Singapore Dollar$172 $43 
Thai Baht131 46 
Chinese Renminbi73 21 
British Pound Sterling54 16 
$430 $126 

The Company is subject to equity market risks due to changes in the fair value of the notional investments selected by its employees as part of itsNon-qualified Deferred Compensation Plans— non-qualified deferred compensation plan: the Seagate Deferred Compensation PlansPlan (the “SDCPs”“SDCP”). TheIn fiscal year 2014, the Company entered into a Total Return Swap (“TRS”) in order to manage the equity market risks associated with the SDCPsSDCP’s liabilities. The Company pays a floating rate, based on LIBOR plus an interest rate spread, on the notional amount of the TRS. The TRS is designed to substantially offset changes in the SDCPsSDCP’s liabilities due to changes in the value of the investment options made by employees. As of June 28, 2019,July 1, 2022, the notional investments underlying the TRS amounted to $117$104 million. The contract term of the TRS is through January 20202023 and is settled on a monthly basis, therefore limiting counterparty performance risk. The Company doesdid not designate the TRS as a hedge. Rather, the Company records all changes in the fair value of the TRS to earnings to offset the market value changes of the SDCPsSDCP’s liabilities.

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The following table showstables show the Company’s derivative instruments measured at gross fair value as reflected in the Consolidated Balance SheetSheets as of June 28, 2019:

   As of June 28, 2019 
   Derivative Assets   Derivative Liabilities 

(Dollars in millions)

  Balance Sheet
Location		   Fair
Value		   Balance Sheet
Location		   Fair
Value		 

Derivatives designated as hedging instruments:

        

Foreign currency forward exchange contracts

   Other current assets   $—      Accrued expenses   $—   

Derivatives not designated as hedging instruments:

        

Foreign currency forward exchange contracts

   Other current assets    1    Accrued expenses    (1) 

Total return swap

   Other current assets    —      Accrued expenses    —   
    

 

 

     

 

 

 

Total derivatives

    $1     $(1) 
    

 

 

     

 

 

 

Seagate Technology public limited company | 2019 Form 10-K | 75

The following table shows the Company’s derivative instruments measured at gross fair value as reflected in the Consolidated Balance Sheet as of as of June 29, 2018:

   As of June 29, 2018 
   Derivative Assets   Derivative Liabilities 

(Dollars in millions)

  Balance Sheet
Location		   Fair
Value		   Balance Sheet
Location		   Fair
Value		 

Derivatives designated as hedging instruments:

        

Foreign currency forward exchange contracts

   Other current assets   $—      Accrued expenses   $—   

Derivatives not designated as hedging instruments:

        

Foreign currency forward exchange contracts

   Other current assets    10    Accrued expenses    —   

Total return swap

   Other current assets    —      Accrued expenses    —   
    

 

 

     

 

 

 

Total derivatives

    $10     $—   
    

 

 

     

 

 

 

The amount of gain or loss recognized in the Consolidated Statement of Comprehensive Income on derivatives designated as cash flow hedges was not material for fiscal years 2019July 1, 2022 and 2018. The amount of gain or loss recognized in income related to the ineffective portion of the hedging relationships and to the amount excluded from the assessment of hedge ineffectiveness was not material for the fiscal years 2019 and 2018.

The following table shows the effect of the Company’s derivative instruments on the Consolidated Statements of Comprehensive Income and Consolidated Statement of Operations for the fiscal year ended June 28, 2019:

Derivatives Not Designated as Hedging Instruments

  Location of Gain/
(Loss) Recognized in
Income on Derivatives		  Amount of Gain/
(Loss) Recognized in
Income on Derivatives		 

Foreign currency forward exchange contracts

  Other, net  $20 

Total return swap

  Operating expenses  $3 

July 2, 2021:

As of July 1, 2022
 Derivative AssetsDerivative Liabilities
(Dollars in millions)Balance Sheet
Location		Fair
Value		Balance Sheet
Location		Fair
Value
Derivatives designated as hedging instruments:    
Foreign currency forward exchange contractsOther current assets$— Accrued expenses$(14)
Interest rate swapOther current assets65 Accrued expenses— 
Derivatives not designated as hedging instruments:  
Foreign currency forward exchange contractsOther current assets— Accrued expenses(5)
Total return swapOther current assets— Accrued expenses(4)
Total derivatives $65  $(23)
As of July 2, 2021
 Derivative AssetsDerivative Liabilities
(Dollars in millions)Balance Sheet
Location		Fair
Value		Balance Sheet
Location		Fair
Value
Derivatives designated as hedging instruments:    
Foreign currency forward exchange contractsOther current assets$1 Accrued expenses$(5)
Interest rate swapOther current assets— Accrued expenses(14)
Derivatives not designated as hedging instruments:  
Foreign currency forward exchange contractsOther current assets1 Accrued expenses(2)
Total return swapOther current assets2 Accrued expenses— 
Total derivatives $4  $(21)

The following tables show the effect of the Company’s derivative instruments on the Consolidated Statement of Comprehensive Income and Consolidated Statement of Operations for the fiscal year ended June 29, 2018:

Derivatives Not Designated as Hedging Instruments

  Location of Gain/
(Loss) Recognized in
Income on Derivatives		  Amount of Gain/
(Loss) Recognized in
Income on Derivatives		 

Foreign currency forward exchange contracts

  Other, net  $10 

Total return swap

  Operating expenses  $6 

July 1, 2022:
9.

Fair Value

Derivatives Not Designated as Hedging InstrumentsLocation of Gain/(Loss) Recognized in
Income on Derivatives		Amount of Gain/(Loss) Recognized in
Income on Derivatives
Foreign currency forward exchange contractsOther, net$(9)
Total return swapOperating expenses(18)


(Dollars in millions)

Derivatives Designated as Hedging Instruments		Amount of Gain/(Loss) Recognized in OCI on Derivatives (Effective Portion)Location of Gain/(Loss) Reclassified from Accumulated OCI into Income (Effective Portion)Amount of Gain/(Loss) Reclassified from Accumulated OCI into Income (Effective Portion)Location of Gain/(Loss) Recognized in Income on Derivatives (Ineffective Portion and Amount Excluded from Effectiveness Testing)Amount of Gain/(Loss) Recognized in Income (Ineffective Portion and Amount Excluded from Effectiveness Testing)
Foreign currency forward exchange contracts$(22)Cost of revenue$(11)Other, net$1 
Interest rate swap70 Interest expense(10)Interest expense— 

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The following tables show the effect of the Company’s derivative instruments on the Consolidated Statement of Comprehensive Income and Consolidated Statement of Operations for the fiscal year ended July 2, 2021:
Derivatives Not Designated as Hedging InstrumentsLocation of Gain/(Loss) Recognized in
Income on Derivatives		Amount of Gain/(Loss) Recognized in
Income on Derivatives
Foreign currency forward exchange contractsOther, net$10 
Total return swapOperating expenses30 
(Dollars in millions)

Derivatives Designated as Hedging Instruments		Amount of Gain/(Loss) Recognized in OCI on Derivatives (Effective Portion)Location of Gain/(Loss) Reclassified from Accumulated OCI into Income (Effective Portion)Amount of Gain/(Loss) Reclassified from Accumulated OCI into Income (Effective Portion)Location of Gain/(Loss) Recognized in Income on Derivatives (Ineffective Portion and Amount Excluded from Effectiveness Testing)Amount of Gain/(Loss) Recognized in Income (Ineffective Portion and Amount Excluded from Effectiveness Testing)
Foreign currency forward exchange contracts$7 Cost of revenue$14 Other, net$1 
Interest rate swap8 Interest expense(7)Interest expense— 
9.Fair Value
Measurement of Fair Value

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

Fair Value Hierarchy

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

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

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

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

Seagate Technology public limited company | 2019 Form 10-K | 76

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

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Items Measured at Fair Value on a Recurring Basis

The following table presents the Company’s assets and liabilities that are measured at fair value on a recurring basis, excluding accrued interest components, as of June 28, 2019:

   Fair Value Measurements at Reporting Date Using 

(Dollars in millions)

  Quoted Prices
in Active
Markets for
Identical
Instruments
(Level 1)		   Significant
Other
Observable
Inputs
(Level 2)		   Significant
Unobservable
Inputs
(Level 3)		   Total
Balance		 

Assets:

        

Money market funds

  $416   $—     $—     $416 

Time deposits and certificates of deposit

   —      132    —      132 
  

 

 

   

 

 

   

 

 

   

 

 

 

Total cash equivalents

   416    132    —      548 
  

 

 

   

 

 

   

 

 

   

 

 

 

Restricted cash and investments:

        

Money market funds

   1    —      —      1 

Time deposits and certificates of deposit

   —      1    —      1 

Other debt securities

   —      —      7    7 

Derivative assets

   —      1    —      1 
  

 

 

   

 

 

   

 

 

   

 

 

 

Total assets

  $417   $134   $7   $558 
  

 

 

   

 

 

   

 

 

   

 

 

 

Liabilities:

        

Derivative liabilities

  $—     $1   $—     $1 
  

 

 

   

 

 

   

 

 

   

 

 

 

Total liabilities

  $—     $1   $—     $1 
  

 

 

   

 

 

   

 

 

   

 

 

 

   Fair Value Measurements at Reporting Date Using 

(Dollars in millions)

  Quoted Prices
in Active
Markets for
Identical
Instruments
(Level 1)		   Significant
Other
Observable
Inputs
(Level 2)		   Significant
Unobservable
Inputs
(Level 3)		   Total
Balance		 
Assets:                

Cash and cash equivalents

  $416   $132   $—     $548 

Other current assets

   1    2    —      3 

Other assets, net

   —      —      7    7 
  

 

 

   

 

 

   

 

 

   

 

 

 

Total assets

  $417   $134   $7   $558 
  

 

 

   

 

 

   

 

 

   

 

 

 

Liabilities:

        

Accrued expenses

  $—     $1   $—     $1 
  

 

 

   

 

 

   

 

 

   

 

 

 

Total liabilities

  $—     $1   $—     $1 
  

 

 

   

 

 

   

 

 

   

 

 

 

Seagate Technology public limited company | 2019 Form 10-K | 77

The following tables present the Company’s assets and liabilities, by financial instrument type and balance sheet line item that are measured at fair value on a recurring basis, excluding accrued interest components, as of June 29, 2018:

   Fair Value Measurements at Reporting Date Using 

(Dollars in millions)

  Quoted Prices
in Active
Markets for
Identical
Instruments
(Level 1)		   Significant
Other
Observable
Inputs
(Level 2)		   Significant
Unobservable
Inputs
(Level 3)		   Total
Balance		 

Assets:

        

Money market funds

  $620   $—     $—     $620 

Time deposits and certificates of deposit

   —      392    —      392 
  

 

 

   

 

 

   

 

 

   

 

 

 

Total cash equivalents

   620    392    —      1,012 
  

 

 

   

 

 

   

 

 

   

 

 

 

Restricted cash and investments:

        

Money market funds

   1    —      —      1 

Time deposits and certificates of deposit

   —      3    —      3 

Derivative assets

   —      10    —      10 
  

 

 

   

 

 

   

 

 

   

 

 

 

Total assets

  $621   $405   $—     $1,026 
  

 

 

   

 

 

   

 

 

   

 

 

 

   Fair Value Measurements at Reporting Date Using 

(Dollars in millions)

  Quoted Prices
in Active
Markets for
Identical
Instruments
(Level 1)		   Significant
Other
Observable
Inputs
(Level 2)		   Significant
Unobservable
Inputs
(Level 3)		   Total
Balance		 

Assets:

        

Cash and cash equivalents

  $620   $392   $—     $1,012 

Other current assets

   1    13    —      14 
  

 

 

   

 

 

   

 

 

   

 

 

 

Total assets

  $621   $405   $—     $1,026 
  

 

 

   

 

 

   

 

 

   

 

 

 

of:

July 1, 2022July 2, 2021
 Fair Value Measurements at Reporting Date UsingFair Value Measurements at Reporting Date Using
(US Dollars in millions)Quoted Prices in Active Markets for Identical Instruments
(Level 1)		Significant Other Observable Inputs
(Level 2)		Significant Unobservable Inputs
(Level 3)		Total
Balance		Quoted Prices in Active Markets for Identical Instruments
(Level 1)		Significant Other Observable Inputs
(Level 2)		Significant Unobservable Inputs
(Level 3)		Total
Balance
Assets:    
Money market funds$59 $— $— $59 $551 $— $— $551 
Total cash equivalents59 — — 59 551 — — 551 
Restricted cash and investments:    
Money market funds1 — — 1 1 — — 1 
Time deposits and certificates of deposit— 1 — 1 — 1 — 1 
Other debt securities— — 23 23 — — 18 18 
Derivative assets— 65 — 65 — 4 — 4 
Total assets$60 $66 $23 $149 $552 $5 $18 $575 
Liabilities:    
Derivative liabilities$— $23 $— $23 $— $21 $— $21 
Total liabilities$— $23 $— $23 $— $21 $— $21 
July 1, 2022July 2, 2021
 Fair Value Measurements at Reporting Date UsingFair Value Measurements at Reporting Date Using
(US Dollars in millions)Quoted Prices in Active Markets for Identical Instruments
(Level 1)		Significant Other Observable Inputs
(Level 2)		Significant Unobservable Inputs
(Level 3)		Total
Balance		Quoted Prices in Active Markets for Identical Instruments
(Level 1)		Significant Other Observable Inputs
(Level 2)		Significant Unobservable Inputs
(Level 3)		Total
Balance
Assets:    
Cash and cash equivalents$59 $— $— $59 $551 $— $— $551 
Other current assets1 66 — 67 1 5 — 6 
Other assets, net— — 23 23 — — 18 18 
Total assets$60 $66 $23 $149 $552 $5 $18 $575 
Liabilities:
Accrued expenses$— $23 $— $23 $— $21 $— $21 
Total liabilities$— $23 $— $23 $— $21 $— $21 
The Company classifies items in Level 1 if the financial assets consist of securities for which quoted prices are available in an active market.

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The Company classifies items in Level 2 if the financial asset or liability is valued using observable inputs. The Company uses observable inputs including quoted prices in active markets for similar assets or liabilities. Level 2 assets include: agency bonds, corporate bonds, commercial paper, municipal bonds, U.S. Treasuries, time deposits and certificates of deposit. These debt investments are priced using observable inputs and valuation models which vary by asset class. The Company uses a pricing service to assist in determining the fair valuesvalue of all of its cash equivalents and short-term investments.equivalents. For the cash equivalents and short-term investments in the Company’s portfolio, multiple pricing sources are generally available. The pricing service uses inputs from multiple industry standard data providers or other third partythird-party sources and various methodologies, such as weighting and models, to determine the appropriate price at the measurement date. The Company corroborates the prices obtained from the pricing service against other independent sources and, as of June 28, 2019,July 1, 2022, has not found it necessary to make any adjustments to the prices obtained. The Company’s derivative financial instruments are also classified within Level 2. The Company’s derivative financial instruments consist of foreign currency forward exchange contracts, interest rate swaps and the TRS. The Company recognizes derivative financial instruments in its consolidated financial statements at fair value. The Company determines the fair value of these instruments by considering the estimated amount it would pay or receive to terminate these agreements at the reporting date.

Seagate Technology public limited company | 2019 Form 10-K | 78

Items Measured at Fair Value on aNon-Recurring Basis

From time to time, the Company enters into certain strategic investments for the promotion of business and strategic objectives. These strategic investments primarily include cost basis investments representing those whereobjectives, which are accounted for either under the Company does haveequity method or the ability to exercise significant influence but does not have control. These investments are includedmeasurement alternative. If measured at fair value in Other assets, net in the Company’s Consolidated Balance Sheets, these investments would generally be classified in Level 3 of the fair value hierarchy.
For the investments that are accounted for under the equity method, the Company recorded a net gain of $8 million and $48 million in fiscal years 2022 and 2021, respectively and a net loss of $2 million in fiscal year 2020. The adjusted carrying value of the investments accounted under the equity method amounted to $61 million and $78 million as of July 1, 2022 and July 2, 2021 respectively.
For the investments that are periodically analyzedaccounted under the measurement alternative, the Company recorded $4 million of net gains in fiscal year 2022. For the investments that are accounted for under the measurement alternative, Company recorded $51 million of net gains in fiscal year 2021, of which $27 million was unrealized as of July 2, 2021 related to determine whether or not there are indicatorsupward adjustments due to observable price changes. For fiscal year 2021, the Company recorded downward adjustment of impairment.

$12 million to write down the carrying amount of certain investments to their fair value. As of June 28, 2019July 1, 2022 and June 29, 2018,July 2, 2021, the carrying value of the Company’s strategic investments were $114under the measurement alternative was $88 millionand $118$117 million, respectively. During fiscal years 2018 and 2017, the Company determined that certain of its equity investments accounted for under the cost method were other-than-temporarily impaired, and recognized charges of $11 million and $25 million, respectively, in order to write down the carrying amount of the investments to its estimated fair value. For fiscal year 2019, there were no upward or downward adjustments on equity investments as a result of adoption of the measurement alternative.

As of June 28, 2019 and June 29, 2018, the Company had $23 million and $26 million, respectively, of held for sale land and building (collectively, the “properties”) included in Other current assets on its Consolidated Balance Sheets. During fiscal year 2019, the Company completed the sale of certain property in the Americas and recorded a gain of approximately $78 million. Additionally, the Company accepted an offer to sell certain property in Asia and thereafter, recorded an impairment charge of approximately $3 million. The gain and the impairment charge were recorded in Restructuring and other, net in the Company’s Consolidated Statement of Operations. The sale of the property was subsequently completed in the beginning of fiscal year 2020. Please refer to Note 17.Subsequent Events for more details. During fiscal year 2018, the Company completed the sale of certain properties and recorded a gain of approximately $25 million, which was included in Restructuring and other, net in the Consolidated Statements of Operations. No impairment was identified during fiscal year 2018. During fiscal year 2017, the Company recorded impairment charges of $35 million in order to write down the carrying amount of certain properties to their estimated fair values less costs to sell. The impairment charges were recorded in Operating expenses in the Consolidated Statements of Operations.

Other Fair Value Disclosures

On June 17, 2019, the Company received approximately $1.3 billion in cash from TMHC for the redemption of all of the outstanding sharesof non-convertible preferred stock of TMHC held by the Company. The debt security was recorded at amortized cost and its fair value approximates the carrying value at June 29, 2018. The fair value was determined utilizing Level 2 inputs such as discount rates and yield terms of similar types of securities issued by comparable companies. Please refer to Note 2.Balance Sheet Information for more details.

Seagate Technology public limited company | 2019 Form 10-K | 79

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

   June 28, 2019   June 29, 2018 

(Dollars in millions)

  Carrying
Amount		   Estimated
Fair Value		   Carrying
Amount		   Estimated
Fair Value		 

3.75% Senior Notes due November 2018

  $—     $—     $499   $501 

4.250% Senior Notes due March 2022

   749    763    749    743 

4.75% Senior Notes due June 2023

   941    973    951    942 

4.875% Senior Notes due March 2024

   498    514    497    489 

4.75% Senior Notes due January 2025

   920    929    975    936 

4.875% Senior Notes due June 2027

   689    688    695    650 

5.75% Senior Notes due December 2034

   489    482    489    441 
  

 

 

   

 

 

   

 

 

   

 

 

 
  $4,286   $4,349   $4,855   $4,702 

Less: debt issuance costs

   (33)    —      (36)    —   
  

 

 

   

 

 

   

 

 

   

 

 

 

Long-term debt, net of debt issuance costs

  $4,253   $4,349   $4,819   $4,702 

Less: current portion of long-term debt, net of debt issuance costs

   —      —      (499)    (501) 
  

 

 

   

 

 

   

 

 

   

 

 

 

Long-term debt, less current portion

  $4,253   $4,349   $4,320   $4,201 
  

 

 

   

 

 

   

 

 

   

 

 

 

10.

Shareholders’ Equity

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 July 1, 2022July 2, 2021
(Dollars in millions)Carrying
Amount		Estimated
Fair Value		Carrying
Amount		Estimated
Fair Value
4.250% Senior Notes due March 2022$— $— $220 $224 
4.750% Senior Notes due June 2023540 538 541 578 
4.875% Senior Notes due March 2024499 494 499 544 
4.750% Senior Notes due January 2025479 471 479 529 
4.875% Senior Notes due June 2027504 483 504 561 
4.091% Senior Notes due June 2029466 427 461 519 
3.125% Senior Notes due July 2029500 396 500 488 
4.125% Senior Notes due January 2031500 410 499 513 
3.375% Senior Notes due July 2031500 393 500 487 
5.750% Senior Notes due December 2034489 433 489 566 
LIBOR Based Term Loan A1 due September 2025600 588 — — 
LIBOR Based Term Loan A2 due July 2027600 586 — — 
LIBOR Based Term Loan due September 2025— — 481 478 
$5,677 $5,219 $5,173 $5,487 
Less: debt issuance costs(31)— (34)— 
Debt, net of debt issuance costs$5,646 $5,219 $5,139 $5,487 
Less: current portion of debt, net of debt issuance costs(584)(582)(245)(249)
Long-term debt, less current portion, net of debt issuance costs$5,062 $4,637 $4,894 $5,238 
10.Shareholders’ Equity
Share Capital

The Company’s authorized share capital is $13,500 and consists of 1,250,000,000 ordinary shares, par value $0.00001, of which 269,097,971209,850,169 shares were outstanding as of June 28, 2019,July 1, 2022, and 100,000,000 preferred shares, par value $0.00001, of which none were issued or outstanding as of June 28, 2019.

July 1, 2022.

On May 18, 2021, in connection with a corporate reorganization, a new Irish public limited company, STX, began serving as the publicly traded parent company, and pursuant to a scheme of arrangement under Irish law, each STUC ordinary shareholder received one ordinary share, par value $0.00001, of STX on a one-for-one basis. As of May 18, 2021, there were 227,340,817 ordinary shares of $0.00001 par value per share exchanged in connection with the reorganization.
Ordinary shares- Holders of ordinary shares are entitled to receive dividends when and as declared by the Company’s board of directors (the “Board of Directors”). Upon any liquidation, dissolution, or winding up of the Company, after required payments are made to holders of preferred shares, any remaining assets of the Company will be distributed ratably to holders of the preferred and ordinary shares. Holders of shares are entitled to one vote per share on all matters upon which the ordinary shares are entitled to vote, including the election of directors.

Preferred shares- The Company may issue preferred shares in one1 or more series, up to the authorized amount, without shareholder approval. The Board of Directors is authorized to establish from time to time the number of shares to be included in each series, and to fix the rights, preferences and privileges of the shares of each wholly unissued series and any of its qualifications, limitations or restrictions. The Board of Directors can also increase or decrease the number of shares of a series, but not below the number of shares of that series then outstanding, without any further vote or action by the shareholders.

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

Seagate Technology public limited company | 2019 Form 10-K | 80

Repurchases of Equity Securities

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All repurchases are effected as redemptions in accordance with the Company’s Articles of Association.

On October 29, 2018, theConstitution.

The Company’s Board of Directors authorizedincreased the authorization for the repurchase of an additional $2.3 billion of its outstanding ordinary shares and as a result, the Company had an aggregate authority to repurchase approximatelyby $3.0 billion of its ordinary shares. on October 21, 2020, and $2.0 billion on February 22, 2021. As of June 28, 2019, $2.2July 1, 2022, $2.4 billion remained available for repurchase under the existing repurchase authorization limit.

The following table sets forth information with respect to repurchases of the Company’s ordinary shares during fiscal years 2019, 20182022, 2021 and 2017:2020:
(In millions)Number of Shares RepurchasedDollar Value of Shares Repurchased
Cumulative repurchased through June 28, 2019374 $11,499 
Repurchased in fiscal year 2020(1)
18 887 
Cumulative repurchased through July 3, 2020392 12,386 
Repurchased in fiscal year 2021(1)
34 2,081 
Cumulative repurchased through July 2, 2021426 14,467 
Repurchased in fiscal year 2022(1)
21 1,857 
Cumulative repurchased through July 1, 2022447 $16,324 

(In millions)

  Number of Shares
Repurchased		   Dollar Value
of Shares
Repurchased		 

Cumulative repurchased through July 1, 2016

   328   $9,631 

Repurchased in fiscal year 2017(a)

   13    487 
  

 

 

   

 

 

 

Cumulative repurchased through June 30, 2017

   341    10,118 

Repurchased in fiscal year 2018(a)

   11    384 
  

 

 

   

 

 

 

Cumulative repurchased through June 29, 2018

   352    10,502 

Repurchased in fiscal year 2019(a)

   22    997 
  

 

 

   

 

 

 

Cumulative repurchased through June 28, 2019

   374   $11,499 
  

 

 

   

 

 

 

(a)

For fiscal years 2019, 2018 and 2017, includes net share settlements of $31 million, $23 million, and $27 million for 1 million, 1 million and 1 million shares in connection with tax withholding related to vesting of restricted stock units, respectively.

11.

Share-Based Compensation

(1)     For fiscal years 2022, 2021 and 2020, includes net share settlements of $51 million, $33 million and $40 million for1 million, 1 million and 1 million shares, respectively, in connection with tax withholding related to vesting of restricted share units.
11.Share-Based Compensation
Share-Based Compensation Plans

The Company’s share-based compensation plans have been established to promote the Company’s long-term growth and financial success by providing incentives to its employees, directors and consultants through grants of share-based awards. The provisions of the Company’sCompany's share-based benefit plans, which allow for the grant of various types of equity-based awards, are also intended to provide greater flexibility to maintain the Company’sCompany's competitive ability to attract, retain and motivate participants for the benefit of the Company and its shareholders.

Seagate Technology Holdings plc 20122022 Equity Incentive Plan (the “EIP”“2022 EIP”).: On October 26, 2011,20, 2021, (the “Approval Date”), shareholders of the shareholdersCompany approved the adoption of the 2022 EIP in replacement of Seagate Technology Holdings plc 2012 Equity Inventive Plan (the “2012 EIP”), which was retired as of the Approval Date. The 2022 EIP provides for the grant of various types of awards including restricted share units (“RSUs”), options, performance-based share units (“PSUs”) and authorizedshare appreciation rights. The maximum number of shares that may be delivered to the issuance of up to a total of approximately 27.0participants under the 2022 EIP shall not exceed (i) 14.1 million ordinary shares, par value $0.00001 per share, plus (ii) any shares remaining available for grant under the Seagate Technology plc 2004 Share Compensation Plan (the “SCP”) as of the effective date of the EIP (which was equalsubject to approximately 11.0 million ordinary shares as of the effective date of the EIP and which will increase by such additional number of shares as will be returned to theany outstanding share reserve in respect of awards previously granted under the SCP) (together,2012 EIP that, on or after the Approval Date expire, are cancelled or otherwise terminate, in whole or in part, without having been exercised or redeemed in full, or are settled in cash ((i) and (ii) together being the “Share Reserve”). On October 22, 2014, the shareholders authorized the issuance from the EIPThe maximum aggregate number of an additional 25shares that may be issued pursuant to RSUs or PSUs (collectively, “Full-Value Share Awards”) shall not exceed 12.3 million ordinary shares, par value $0.00001 per share.shares. Any shares that are subject to options or share appreciation rights granted under the 2022 EIP will be counted against the Share Reserve as one share for every one share granted, and any shares that are subject to restricted share bonus awards, restricted share units, performance share bonus awards or performance share awards (collectively, “Full-Value Share Awards”) will generally be counted against the Share Reserve as 2.5 shares for every one share granted. On October 19, 2016, the shareholders authorized the issuance from the EIP of an additional 7.5 million ordinary shares, par value $0.00001 per share. As of June 28, 2019,July 1, 2022, there were approximately 19.712.0 million ordinary shares available for issuance of Full-Value Share Awards under the 2022 EIP.

Dot Hill Systems 2009 Equity Incentive Plan (the “DHEIP”). Effective May 18, 2021, Seagate Technology Holdings plc acquiredassumed the Dot Hill Systems 2009 Equity Incentive Plan, which was acquired by STUC effective October 6, 2015. The Company assumed the remaining authorized but unused share reserve of

Seagate Technology public limited company | 2019 Form 10-K | 81

approximately 22.0 million shares, based on the conversion ratio, from the DHEIP on the acquisition date. Effective April 24, 2019, the Company terminated the DHEIP and thus, no further grants will be made under the DHEIP. Outstanding awards granted under the DHEIP will remain subject to the terms of the DHEIP.

Seagate Technology Holdings plc Employee Stock Purchase Plan (the “ESPP”). There are 60.0 million ordinary shares authorized to be issued under the ESPP. The ESPP consists of asix-monthsix-month offering period with a maximum issuance of 1.5 million ordinary shares per offering period. The ESPP permits eligible employees to purchase ordinary shares through payroll deductions generally at 85% of the fair market value of the ordinary shares. As of June 28, 2019,July 1, 2022, there were approximately 11.47.5 million ordinary shares available for issuance under the ESPP.

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Equity Awards

Full-Value Share Awards (e.g. restricted share units, “RSU”)

RSUs generally vest over a period of three to four years, with cliff vesting of a portion of each award occurring annually, subject to continuous employment with the Company through the vesting date. Options generally vest as follows: 25% of the options will vest on the first anniversary of the vesting commencement date and the remaining 75% will vest ratably each month thereafter over the next 36 months. Options granted under the 2022 EIP and SCP2012 EIP have an exercise price equal to the fair market value of the Company’s ordinary shares on the grant date. Fair market value is defined as the closing price of the Company’sCompany's ordinary shares on NASDAQ on the grant date.

The Company granted awards of performance-based share units (“PSU”)PSUs to its senior executive officers under the SCP2022 EIP and the2012 EIP where vesting is subject to both the continued employment of the participant by the Company and the achievement of certain financial and operational performance goals established by the Compensation Committee of the Company’s Board of Directors including market-based performance goals.(the “Compensation Committee”). A single PSU represents the right to receive a single ordinary share of the Company. During fiscal years 2019, 20182022, 2021 and 2017,2020, the Company granted 0.40.3 million, 0.40.3 million and 0.60.3 million PSUs, respectively, where performance is measured based on a three-year average return on invested capital (“ROIC”) goal and a relative total shareholder return (“TSR”) goal, which is based on the Company’s ordinary shares measured against a benchmark TSR of a peer group over the same three-year period (the “TSR/ROIC” awards). For fiscal year 2022, the PSUs granted to certain executive officers contain two ESG modifiers that will increase or decrease the PSU achievement level based on the Company’s performance against both a social goal of gender diversity and an environmental goal of greenhouse gas reduction. These awards vest after the end of the performance period of three years from the grant date. A percentage of these units may vest only if at least the minimum ROIC goal is met regardless of whether the TSR goal is met. The number of share units to vest will range from 0% to 200% of the targeted units. In evaluating the fair value of these units, the Company used a Monte Carlo simulation on the grant date, taking the market-based TSR goal into consideration. Compensation expense related to these units is only recorded in a period if it is probable that the ROIC goal will be met, and it is to be recorded at the expected level of achievement.

The Company also granted 0.1 million 0.2 million and 0.20.1 million PSUs during fiscal years 2019, 20182021 and 2017,2020, respectively, to certain of its senior executive officers which are subject to a performance goal related to the Company’sCompany's adjusted earnings per share (the “AEPS” awards)(“AEPS”). These awards have a maximum seven-yearseven-year vesting period, with 25% annual vesting starting on the first anniversary of the grant date. If the performanceAEPS goal is not achieved, vesting is delayed to a following year in which the AEPS goal is achieved. Any unvested awards from prior years may vest cumulatively in a future year within the seven-yearseven-year vesting period if the annual AEPS goal is achieved during a subsequent year. If the AEPS goal has not been met by the end of the seven yearseven-year period, any unvested shares will be forfeited.

Determining Fair Value of Seagate Technology StockShare Plans

Valuation and amortization method–- The Company estimates the fair value of stockgranted share options, RSURSUs and performance awardsPSUs subject to an AEPS condition granted using the Black-Scholes-Merton valuation model and a single share award approach. This fair value is then amortized on a straight-line basis over the requisite service periods of the awards, which is generally the vesting period or the remaining service (vesting) period.

Expected Term–- Expected term represents the period that the Company’s share-based awards are expected to be outstanding and was determined based on historical experience of similar awards, giving consideration to the contractual terms of the share-based awards, vesting schedules and expectations of future employee behavior as influenced by changes to the terms of its share-based awards.

Expected Volatility–- The Company uses a combination of the implied volatility of its traded options and historical volatility of its share price.

Seagate Technology public limited company | 2019 Form 10-K | 82

Expected Dividend–- The Black-Scholes-Merton valuation model calls for a single expected dividend yield as an input. The dividend yield is determined by dividing the expected per share dividend during the coming year by the grant date share price. The expected dividend assumption is based on the Company’s current expectations about its anticipated dividend policy. Also, because the expected dividend yield should reflect marketplace participants’ expectations, the Company does not incorporate changes in dividends anticipated by management unless those changes have been communicated to or otherwise are anticipated by marketplace participants.

Risk-Free Interest Rate–- The Company bases the risk-free interest rate used in the Black-Scholes-Merton valuation model on the implied yield currently available on U.S. Treasuryzero-coupon issues with an equivalent remaining term. Where the expected term of the Company’sCompany's share-based awards do not correspond with the terms for which interest rates are quoted, the Company performed a straight-line interpolation to determine the rate from the available term maturities.

Seagate Technology public limited company | 2019 Form 10-K | 83

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The fair value of the Company’s shares related to options and RSURSUs granted to employees, shares issued from the ESPP and PSUs subject to TSR/ROIC or AEPS conditions for fiscal years 2019, 20182022, 2021 and 20172020 were estimated using the following assumptions:

   Fiscal Years 
   2019  2018  2017 

Options

    

Expected term (in years)

   4.2   4.2   4.2 

Volatility

   39 - 40%   38 - 42%   38 - 42% 

Weighted-average volatility

   39%   40%   39% 

Expected dividend rate

   4.6 - 5.0%   3.8 - 7.4%   4.9 - 6.4% 

Weighted-average expected dividend rate

   4.7%   6.8%   6.3% 

Risk-free interest rate

   2.5 - 2.8%   1.5 - 2.7%   1.1 - 1.8% 

Weighted-average fair value

  $11.49  $6.56  $6.83 

RSU

    

Expected term (in years)

   4.2   4.2   4.2 

Expected dividend rate

   4.1 - 6.4%   3.5 - 7.4%   4.6 - 7.7% 

Weighted-average expected dividend rate

   4.68%   7.11%   6.4% 

Weighted-average fair value

  $44.37  $26.69  $30.85 

ESPP

    

Expected term (in years)

   0.5   0.5   0.5 

Volatility

   34 - 42%   37 - 38%   36 - 49% 

Weighted-average volatility

   38%   37%   43% 

Expected dividend rate

   4.8 - 5.6%   4.6 - 7.6%   5.6 - 7.8% 

Weighted-average expected dividend rate

   5.2%   6.5%   6.8% 

Risk-free interest rate

   2.2 - 2.4%   1.1 - 1.6%   0.4 - 0.6% 

Weighted-average fair value

  $12.18  $10.10  $9.78 

PSUs subject to market condition

    

Expected term (in years)

   3.0   3.0   3.0 

Volatility

   46%   45%   41 - 42% 

Weighted-average volatility

   46%   45%   41% 

Expected dividend rate

   5.0%   8.1%   6.3 - 7.0% 

Weighted-average expected dividend rate

   5.0%   8.1%   7.0% 

Risk-free interest rate

   2.8%   1.4%   0.9 - 1.3% 

Weighted-average fair value

  $46.38  $25.90  $32.41 

PSUs subject to an AEPS condition

    

Expected term (in years)

   4.2   4.2   4.2 

Expected dividend rate

   4.6 - 5.0%   5.8 - 7.2%   5.9 - 6.4% 

Weighted-average expected dividend rate

   4.7%   7.0%   6.2% 

Weighted-average fair value

  $43.92  $27.10  $31.61 

Seagate Technology public limited company | 2019 Form 10-K | 84

 Fiscal Years
 202220212020
Options   
Expected term (in years)4.24.24.2
Volatility38 %37 - 38 %39 %
Weighted-average volatility38 %38 %39 %
Expected dividend rate2.8 %3.2 - 5.2 %4.2 %
Weighted-average expected dividend rate2.8 %4.7 %4.2 %
Risk-free interest rate0.6 %0.2 - 0.7 %1.4 %
Weighted-average fair value$21.02 $10.77 $12.41 
RSUs
Expected term (in years)1 - 2.51 - 2.51 - 2.5
Expected dividend rate2.4 - 3.4 %2.5 - 5.4 %3.9 - 5.8 %
Weighted-average expected dividend rate2.8 %4.6 %4.3 %
Weighted-average fair value$82.40 $50.64 $49.49 
ESPP   
Expected term (in years)0.50.50.5
Volatility36 - 39 %39 - 44 %32 - 35 %
Weighted-average volatility37 %42 %33 %
Expected dividend rate2.6 - 3.0 %4.0 - 5.8 %4.3 - 5.4 %
Weighted-average expected dividend rate2.8 %5.1 %4.9 %
Risk-free interest rate0.1 - 0.5 %0.1 %1.6 - 2.0 %
Weighted-average fair value$24.38 $13.77 $12.23 
PSUs subject to TSR/ROIC conditions   
Expected term (in years)3.03.03.0
Volatility39 %38 %37 %
Weighted-average volatility39 %38 %37 %
Expected dividend rate3.1 %5.6 %4.6 %
Weighted-average expected dividend rate3.1 %5.6 %4.6 %
Risk-free interest rate0.4 %0.2 %1.5 %
Weighted-average fair value$86.01 $43.20 $52.39 
PSUs subject to an AEPS condition
Expected term (in years)— 2.52.5
Expected dividend rate— 3.2 - 5.2 %4.2 %
Weighted-average expected dividend rate— 4.9 %4.2 %
Weighted-average fair value— $45.50 $49.27 

Share-Based Compensation Expense

The Company recorded $99$145 million, $112 million and $137$109 million of share-based compensation during fiscal years 2019, 20182022, 2021 and 2017,2020, respectively. Management has made an estimate of expected forfeitures and is recognizing compensation costs only for those equity awards expected to vest. When estimating forfeitures, the Company considers voluntary termination behavior as well as the historical analysis of actual forfeited awards.

Stock

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Share Option Activity

The Company issues new ordinary shares upon exercise of stockshare options. The following is a summary of option activities:

Options

  Number of
Shares
(In millions)		   Weighted-
Average
Exercise
Price		   Weighted-Average
Remaining
Contractual
Term
(In years)		   Aggregate
Intrinsic
Value
(Dollars in millions)		 

Outstanding at June 29, 2018

   4.0   $39.00    5.0   $72 

Granted

   0.4   $48.99     

Exercised

   (0.4)   $33.55     

Forfeitures

   (0.5)   $35.71     

Expirations

   —     $—       
  

 

 

       

Outstanding at June 28, 2019

   3.5   $41.04    4.2   $29 
  

 

 

       

Vested and expected to vest at June 28, 2019

   3.4   $41.06    4.2   $29 
  

 

 

       

Exercisable at June 28, 2019

   2.1   $42.11    3.6   $16 
  

 

 

       

Options
Number of Shares
(In millions)
Weighted-Average Exercise Price
Weighted-Average Remaining Contractual Term
(In years)
Aggregate Intrinsic Value
(Dollars in millions)
Outstanding at July 2, 20211.6 $44.24 4.0$69 
Granted0.2 $87.34   
Exercised(0.2)$45.48   
Outstanding at July 1, 20221.6 $49.26 3.6$36 
Vested and expected to vest at July 1, 20221.6 $49.01 3.5$36 
Exercisable at July 1, 20221.1 $41.53 2.8$31 
The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the quoted price of the Company’s ordinary shares for the options that werein-the-money at June 28, 2019.July 1, 2022. During fiscal years 2019, 20182022, 2021 and 2017,2020, the aggregate intrinsic value of options exercised under the Company’s stockshare option plans was $5$11 million, $34$31 million and $29$22 million, respectively, determined as of the date of option exercise. The aggregate fair value of options vested during fiscal years 2019, 20182022, 2021 and 2017 were2020 was approximately $9$4 million, $12$4 million and $15$6 million, respectively.

At June 28, 2019,July 1, 2022, the total compensation cost related to options granted to employees but not yet recognized was approximately $10$6 million, net of an immaterial amount of estimated forfeitures. This cost is being amortized on a straight-line basis over a weighted-average remaining term of approximately 2.4 years and will be adjusted for subsequent changes in estimated forfeitures.
Unvested Awards Activity
The following is a summary of unvested award activities which do not contain a performance condition:
Unvested Awards
Number of Shares
(In millions)
Weighted-Average Grant-Date Fair Value
Unvested at July 2, 20215.9 $47.81 
Granted1.4 $82.40 
Forfeited(0.3)$56.51 
Vested(2.2)$44.45 
Unvested at July 1, 20224.8 $58.86 
At July 1, 2022, the total compensation cost related to unvested awards granted to employees but not yet recognized was approximately $199 million, net of estimated forfeitures of approximately $2$16 million. This cost is being amortized on a straight-line basis over a weighted-average remaining term of approximately 2.2 years and will be adjusted for subsequent changes in estimated forfeitures.

Nonvested Awards Activity

The following is a summary of nonvested award activities which do not contain a performance condition:

Nonvested Awards

  Number of
Shares
(In millions)		   Weighted-Average
Grant-
Date
Fair Value		 

Nonvested at June 29, 2018

   5.2   $30.74 

Granted

   2.5   $44.37 

Forfeitures

   (0.6)   $33.45 

Vested

   (1.7)   $32.72 
  

 

 

   

Nonvested at June 28, 2019

   5.4   $36.01 
  

 

 

   

Seagate Technology public limited company | 2019 Form 10-K | 85

At June 28, 2019, the total compensation cost related to nonvested awards granted to employees but not yet recognized was approximately $129 million, net of estimated forfeitures of approximately $12 million. This cost is being amortized on a straight-line basis over a weighted-average remaining term of 2.3 years and will be adjusted for subsequent changes in estimated forfeitures. The aggregate fair value of nonvestedunvested awards vested during fiscal years 2019, 20182022, 2021 and 20172020 were approximately $57$96 million, $76$75 million and $73$71 million, respectively.

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Performance Awards

The following is a summary of nonvestedunvested award activities which contain a performance condition:

Performance Awards

  Number of
Shares
(In millions)		   Weighted-Average
Grant-Date
Fair Value		 

Performance units at June 29, 2018

   1.2   $33.34 

Granted

   0.5   $45.74 

Forfeitures

   (0.4)   $27.11 

Vested

   (0.3)   $43.85 
  

 

 

   

Performance units at June 28, 2019

   1.0   $43.81 
  

 

 

   

Performance Awards
Number of Shares
(In millions)
Weighted-Average Grant-Date Fair Value
Performance units at July 2, 20211.0 $46.56 
Granted0.3 $89.69 
Forfeited(0.3)$47.35 
Vested(0.1)$41.71 
Performance units at July 1, 20220.9 $59.72 
At June 28, 2019,July 1, 2022, the total compensation cost related to performance awards granted to employees but not yet recognized was approximately $18$30 million, net of estimated forfeitures of approximately $1$4 million. This cost is being amortized on a straight-line basis over a weighted-average remaining term of 1.61.3 years. The aggregate fair value of performance awards vested during fiscal years 2019, 20182022, 2021 and 20172020 were approximately $4 million, $8 million and $12 million, $11 million and $17 million, respectively.

ESPP

During fiscal years 2019, 20182022, 2021 and 2017,2020, the aggregate intrinsic value of shares purchased under the Company’sCompany's ESPP was approximately $10$29 million, $31$27 million and $24$19 million, respectively. At June 28, 2019,July 1, 2022, the total compensation cost related to options to purchase the Company’sCompany's ordinary shares under the ESPP but not yet recognized was approximately $1.6 million. This cost will be amortized on a straight-line basis over a weighted-average period of approximately one month. During fiscal year 2019,2022, the Company issued 1.40.9 million ordinary shares with a weighted-average exercise price of $40.85$64.85 per share.

Tax-Deferred Savings Plan

The Company has atax-deferred savings plan, the Seagate 401(k) Plan (the “401(k) plan”"401(k) plan"), for the benefit of qualified employees. The 401(k) plan is designed to provide employees with an accumulation of funds at retirement. Qualified employees may elect to make contributions to the 401(k) plan on abi-weekly basis. Pursuant to the 401(k) plan, the Company matches 50% of employee contributions, up to 6% of compensation, subject to maximum annual contributions of $6,000 per participating employee. During fiscal years 2019, 20182022, 2021 and 2017,2020, the Company made matching contributions of $16$15 million, $16$15 million and $18$15 million, respectively.

Deferred Compensation Plans

Plan

The Company has adopted the SDCPsSDCP for the benefit of eligible employees. These plans areThe plan is designed to permit certain discretionary employer contributions, in excess of the tax limits applicable to the 401(k) plan, and to permit employee deferrals in excess of certain tax limits. During fiscal year 2014, the Company entered into a TRS in order to manage the equity market risks associated with the SDCPsSDCP liabilities. See Note 8. Derivative Financial Instruments contained in this report for additional information about the TRS.

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12.Guarantees
Indemnifications of Officers and Directors
Seagate Technology, publican exempted company incorporated with limited company | 2019 Form 10-K | 86

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

The nature of these indemnification obligations prevents the Company from making a reasonable estimate of the maximum potential amount it could be required to pay on behalf of its officers and directors. Historically, the Company has not made any significant indemnification payments under such indemnification agreements and no amount has been accrued in the Company’s consolidated financial statements with respect to these indemnification obligations.
Indemnification Obligations
The Company from time to time enters into agreements with customers, suppliers, partners and others in the ordinary course of business that provide indemnification for certain matters including, but not limited to, intellectual property infringement claims, environmental claims and breach of agreement claims. The nature of the Company’s indemnification obligations prevents the Company from making a reasonable estimate of the maximum potential amount it could be required to pay. Historically, the Company has not made any significant indemnification payments under such agreements and no amount has been accrued in the Company’s consolidated financial statements with respect to these indemnification obligations.
Product Warranty
The Company estimates probable product warranty costs at the time revenue is recognized. The Company generally warrants its products for a period of 1 to 5 years. The Company uses estimated repair or replacement costs and uses statistical modeling to estimate product warranty return rates in order to determine its warranty obligation. As of July 1, 2022, the Company’s reserve for product warranty was $148 million compared to $136 million as of July 2, 2021. The increase of $12 million was primarily driven by an increase in the Company’s warranty return rate as compared to prior year and higher cost of repair, partially offset by continued decline in total number of units under warranty.
Changes in the Company’s product warranty liability during the fiscal years ended July 1, 2022, July 2, 2021 and July 3, 2020 were as follows:
 Fiscal Years Ended
(Dollars in millions)July 1,
2022		July 2,
2021		July 3,
2020
Balance, beginning of period$136 $151 $195 
Warranties issued79 76 86 
Repairs and replacements(88)(81)(85)
Changes in liability for pre-existing warranties, including expirations21 (10)(45)
Balance, end of period$148 $136 $151 
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12.

Earnings Per Share

13.Earnings Per Share

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

   Fiscal Years Ended 

(In millions, except per share data)

  June 28,
2019		   June 29,
2018		   June 30,
2017		 
Numerator:      

Net income

  $2,012   $1,182   $772 
  

 

 

   

 

 

   

 

 

 
Number of shares used in per share calculations:      

Total shares for purposes of calculating basic net income per share

   282    288    296 

Weighted-average effect of dilutive securities:

      

Employee equity award plans

   3    4    3 
  

 

 

   

 

 

   

 

 

 

Total shares for purposes of calculating diluted net income per share

   285    292    299 
  

 

 

   

 

 

   

 

 

 

Net income per share

      

Basic

  $7.13   $4.10   $2.61 

Diluted

  $7.06   $4.05   $2.58 

 Fiscal Years Ended
(In millions, except per share data)July 1,
2022		July 2,
2021		July 3,
2020
Numerator:   
Net income$1,649 $1,314 $1,004 
Number of shares used in per share calculations:   
Total shares for purposes of calculating basic net income per share220 242 262 
Weighted-average effect of dilutive securities:   
Employee equity award plans4 3 3 
Total shares for purposes of calculating diluted net income per share224 245 265 
Net income per share   
Basic$7.50 $5.43 $3.83 
Diluted7.36 5.36 3.79 
The following potentialanti-dilutive shares related to employee equity award plans that were excluded from the computation of diluted net income per share as their effect would have been anti-dilutive:

   Fiscal Years Ended 

(In millions)

  June 28,
2019		   June 29,
2018		   June 30,
2017		 

Employee equity award plans

   —      1    1 

13.

Business Segment and Geographic Information

The Company’s manufacturing operations are based on technology platforms that are used to produce various data storage and systems solutions that serve multiple applications and markets. The Company has determined that its Chief Operating Decision Maker (“CODM”),were not material for the Chief Executive Officer, evaluates performance of the Company and makes decisions regarding investments in the Company’s technology platforms and manufacturing infrastructure based on the Company’s consolidated results. As a result, the Company has concluded that its manufacture and distribution of storage solutions constitutes one reporting segment.

In fiscal years 2019ended July 1, 2022, July 2, 2021 and 2018, no customer accounted for more than 10% of consolidated revenue. In fiscal year 2017, only Dell Inc. accounted for approximately 10% of consolidated revenue.

Seagate Technology public limited company | 2019 Form 10-K | 87

July 3, 2020.

The following table summarizes the Company’s operations by geographic area:

   Fiscal Years Ended 

(Dollars in millions)

  June 28,
2019		   June 29,
2018		   June 30,
2017		 

Revenue from external customers(a):

      

Singapore

  $5,085   $5,445   $5,070 

United States

   3,310    3,719    3,535 

The Netherlands

   1,630    1,598    1,501 

Other

   365    422    665 
  

 

 

   

 

 

   

 

 

 

Consolidated

  $10,390   $11,184   $10,771 
  

 

 

   

 

 

   

 

 

 

Long-lived assets:

      

Thailand

  $558   $426   $414 

Singapore

   556    600    570 

United States

   523    565    643 

China

   62    45    58 

Other

   224    212    248 
  

 

 

   

 

 

   

 

 

 

Consolidated

  $1,923   $1,848   $1,933 
  

 

 

   

 

 

   

 

 

 

(a)

Revenue is attributed to countries based on the bill from location.

14.

Legal, Environmental and Other Contingencies

14.Legal, Environmental and Other Contingencies

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

Intellectual Property

Litigation

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

On August 16, 2011, the district court granted in part and denied in part the Company’s motion for summary judgment. On July 1, 2013, the U.S. Court of Appeals for the Federal Circuit: 1) affirmed the district court’s summary judgment rulings that Seagate did not misappropriate any of the alleged trade secrets and that the asserted claims of the ‘635 patent are invalid; 2) reversed and vacated the district court’s summaryjudgment of non-infringement with respect to the ‘473 patent; and 3) remanded the case for further proceedings on the ‘473 patent. On July 11, 2014, the district court granted the Company’s further summary judgment motion regarding the ‘473 patent. On February 10, 2016, the U.S. Court of Appeals for the Federal Circuit: 1) affirmed the district court’s summary judgment of no direct infringement by Seagate because Seagate’s ATA/SCSI

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disk drives do not meet the “user interface” limitation of the asserted claims of the ‘473 patent; 2) affirmed the district court’s summaryjudgment of non-infringement by Compaq’s products as to claims 1, 3, and 5 of the ‘473 patent because Compaq’s F10 BIOS interface does not meet the “commands” limitation of those claims; 3) vacated the district court’s summaryjudgment of non-infringement by Compaq’s accused products asto claims 7-15 of the ‘473 patent; 4) reversed the district court’s summaryjudgment of non-infringement based on intervening rights; and 5) remanded the case to the district court for further proceedings on the ‘473 patent. In view of the rulings made by the district court and the Court of Appeals and the uncertainty regarding the amount of damages, if any, that could be awarded Convolve in this matter, the Company does not believe that it is currently possible to determine a reasonable estimate of the possible range of loss related to this matter.

Lambeth Magnetic Structures LLC v. Seagate Technology (US) Holdings, Inc., et al.On April 29, 2016, Lambeth Magnetic Structures LLC filed a complaint against Seagate Technology (US) Holdings, Inc. and Seagate Technology LLC in the U.S. District Court for the Western District of Pennsylvania, alleging infringement of U.S. Patent No. 7,128,988, “Magnetic Material Structures, Devices and Methods.”Methods”. The complaint seeks damages as well as additional relief. The Company believes the claims asserted in the complaint are without merit and intends to vigorously defend this case. The court issued its claim construction ruling on October 18, 2017. NoThe trial date has been set.began on April 4, 2022. On June 25, 2019,April 14, 2022, the jury returned a verdict of non-infringement for Seagate finding that Seagate had not infringed any of the asserted claims. The district court stayedentered judgement in favor of Seagate on April 19, 2022. The parties filed post-trial motions with the district court in May 2022.

Seagate Technology LLC, et al. v. NHK Spring Co. Ltd. and administratively closedTDK Corporation, et al. On February 18, 2020, Seagate Technology LLC, Seagate Technology (Thailand) Ltd., Seagate Singapore International Headquarters Pte. Ltd., and Seagate Technology International (collectively, the case for“Seagate Entities”) filed a period of 60 days, ending on August 26, 2019,complaint in the United States District Court for the purposeNorthern District of facilitating settlementCalifornia against defendant suppliers of HDD suspension assemblies. Defendants include NHK Spring Co. Ltd., TDK Corporation, Hutchinson Technology Inc., and several of their subsidiaries and affiliates. The complaint includes federal and state antitrust law claims, as well as a breach of contract claim. The complaint alleges that defendants and
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their co-conspirators knowingly conspired for more than twelve years not to compete in the case at mediation.supply of suspension assemblies; that defendants misused confidential information that the Seagate Entities had provided pursuant to nondisclosure agreements, in breach of their contractual obligations; and that the Seagate Entities paid artificially high prices on purchases of suspension assemblies. The court indicated that ifSeagate Entities seek to recover the action has not settledovercharges they paid for suspension assemblies, as well as additional relief permitted by law. On March 22, 2022, Defendants TDK Corporation, Hutchinson Technology Inc. and their subsidiaries and affiliates (collectively “TDK”) and the Seagate Entities entered into a commercial arrangement and release of August 27, 2019,claims (“TDK Agreement”) to fully resolve the court will issue an order scheduling trialglobal disputes between the Seagate Entities and setting pretrial deadlines. While the possible range of loss for this matter remains uncertain, the Company estimates the amount of loss to be immaterialTDK relating to the financial statements.

antitrust law claims, breach of contract claim, and other matters described in the complaint. On April 1, 2022, the Seagate Entities and TDK filed a Stipulation for Dismissal with Prejudice to dismiss with prejudice all claims against TDK.

Environmental Matters

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

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

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

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

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

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other environmental requirements as they are enacted worldwide, it could have a materially adverse effect on the Company’s business.

Other Matters

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

15.

Commitments

15.Commitments
Unconditional Long-Term Purchase Obligations.As of June 28, 2019,July 1, 2022, the Company had unconditional long-term purchase obligations of approximately $212 million,$3.0 billion, primarily related to purchase minimum quarterly amountspurchases of inventory components at fixed contractual prices.components. The Company expects the commitment to total $22$657 million, $13$589 million, $2$660 million, $51 million, $48$745 million and $76$393 million for fiscal years 2021, 2022, 2023, 2024, 2025, 2026, 2027 and thereafter, respectively.

Leases. The Company leases certain property, facilities and equipment undernon-cancelable lease agreements. Land and facility leases expire at various dates through 2082 and contain various provisions for rental adjustments including, in certain cases, a provision based on increases in the Consumer Price Index. In addition, certain leases provide for renewal

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Table of the lease at the Company’s option at expiration of the lease. The lease term begins on the date of initial possession of the leased property for purposes of recognizing lease expense on a straight-line basis over the term of the lease. The Company does not assume renewals in its determination of the lease term unless the renewals are deemed to be reasonably assured at lease inception. All of the leases require the Company to pay property taxes, insurance and normal maintenance costs, which are expensed as incurred.

Future minimum lease payments for operating leases (including accrued lease payments relating to restructuring plans) with initial or remaining terms of one year or more were as follows at June 28, 2019 (lease payments are shown net of sublease income):

Fiscal Years Ending

  Operating Leases
(Dollars in millions)		 

2020

  $20 

2021

   17 

2022

   9 

2023

   8 

2024

   5 

Thereafter

   66 
  

 

 

 

Total

  $125 
  

 

 

 

Total rent expense for all land, facility and equipment operating leases, net of sublease income, was $18 million, $22 million and $29 million for fiscal years 2019, 2018 and 2017, respectively.

Contents

Unconditional Long-termLong-Term Capital Expenditures. As of June 28, 2019,July 1, 2022, the Company had $23 million unconditional long-term commitment of approximately $140 million, primarily related to purchases of equipment.

16.

Guarantees

Indemnifications of Officers The Company expects the capital expenditures to total $132 million, $5 million and Directors

On May 4, 2009, Seagate Technology, an exempted company incorporated with limited liability under$3 million for fiscal years 2024, 2025 and 2026, respectively.

16.Business Segment and Geographic Information
The Company’s manufacturing operations are based on technology platforms that are used to produce various data storage and systems solutions that serve multiple applications and markets. The Company has determined that its Chief Operating Decision Maker, the laws of the Cayman Islands (“Seagate-Cayman”), then the parent company, entered into a new form of indemnification agreement (the

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“Revised Indemnification Agreement”) with its officers and directors of Seagate-Cayman and its subsidiaries (each, an “Indemnitee”). The Revised Indemnification Agreement provides indemnification in addition to any of Indemnitee’s indemnification rights under Seagate-Cayman’s Articles of Association, applicable law or otherwise, and indemnifies an Indemnitee for certain expenses (including attorneys’ fees), judgments, fines and settlement amounts actually and reasonably incurred by him or her in any action or proceeding, including any action by or in the right of Seagate-Cayman or any of its subsidiaries, arising out of his or her service as a director, officer, employee or agent of Seagate-Cayman or any of its subsidiaries or of any other entity to which he or she provides services at Seagate-Cayman’s request. However, an Indemnitee shall not be indemnified under the Revised Indemnification Agreement for (i) any fraud or dishonesty in theChief Executive Officer, evaluates performance of Indemnitee’s duty to Seagate-Cayman or the applicable subsidiary of Seagate-Cayman or (ii) Indemnitee’s conscious, intentional or willful failure to act honestly, lawfully and in good faith with a view to the best interests of Seagate-Cayman or the applicable subsidiary of Seagate-Cayman. In addition, the Revised Indemnification Agreement provides that Seagate-Cayman will advance expenses incurred by an Indemnitee in connection with enforcement of the Revised Indemnification Agreement or with the investigation, settlement or appeal of any action or proceeding against him or her as to which he or she could be indemnified.

On July 3, 2010, pursuant to a corporate reorganization, the common shareholders of Seagate-Cayman became ordinary shareholders of Seagate Technology plc (the “Company”) and Seagate-Cayman became a wholly owned subsidiary of the Company as described more fullyand makes decisions regarding investments in the Current ReportCompany’s technology platforms and manufacturing infrastructure based on Form8-K filed by the Company on July 6, 2010 (the “Redomestication”). On July 27, 2010, in connection with the Redomestication, the Company, as sole shareholder of Seagate-Cayman, approved a form of deed of indemnity (the “Deed of Indemnity”), which provides for the indemnification by Seagate-Cayman of any director, officer, employee or agent of the Company, Seagate-Cayman or any subsidiary of the Company (each, a “Deed Indemnitee”), in addition to any indemnification rights of a Deed Indemnitee under the Company’s Articles of Association, applicable law or otherwise, withconsolidated results. As a similar scope to the Revised Indemnification Agreement. Seagate-Cayman entered into Deeds of Indemnity with certain Deed Indemnitees effective as of July 3, 2010 and continues to enter into Deeds of Indemnity with additional Deed Indemnitees from time to time.

The nature of these indemnification obligations prevents the Company from making a reasonable estimate of the maximum potential amount it could be required to pay on behalf of its officers and directors. Historically,result, the Company has not made any significant indemnification payments under such agreementsconcluded that its manufacture and distribution of storage solutions constitutes one reporting segment.

In fiscal years 2022 and 2021, one customer accounted for approximately 10% and 11% of consolidated revenue, respectively. In fiscal year 2020, no amount has been accrued incustomer accounted for more than 10% of consolidated revenue.
The following table summarizes the Company’s consolidated financial statements with respectoperations by country:
 Fiscal Years Ended
(Dollars in millions)July 1,
2022		July 2,
2021		July 3,
2020
Revenue from external customers (1):
   
Singapore$5,322 $5,180 $5,032 
United States4,694 3,656 3,583 
The Netherlands1,627 1,825 1,572 
Other18 20 322 
Consolidated$11,661 $10,681 $10,509 
Long-lived assets:   
Thailand$679 $682 $681 
United States670 612 567 
Singapore557 570 601 
Other426 411 376 
Consolidated$2,332 $2,275 $2,225 

(1) Revenue is attributed to these indemnification obligations.

Intellectual Property Indemnification Obligations

countries based on the bill from location.

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17.Revenue
The Company has entered into agreements with customersfollowing table provides information about disaggregated revenue by sales channel and suppliers that include limited intellectual property indemnification obligations that are customary in the industry. These guarantees generally require the Company to compensate the other partygeographical region for certain damages and costs incurred as a result of third party intellectual property claims arising from these transactions. The nature of the intellectual property indemnification obligations prevents the Company from making a reasonable estimate of the maximum potential amount it could be required to pay to its customers and suppliers. Historically, the Company has not made any significant indemnification payments under such agreements and no amount has been accrued in the Company’s consolidated financial statements with respectsingle reportable segment:
 Fiscal Years Ended
(Dollars in millions)July 1,
2022		July 2,
2021		July 3,
2020
Revenues by Channel 
OEMs$8,742 $7,403 $7,504 
Distributors1,676 1,854 1,738 
Retailers1,243 1,424 1,267 
Total$11,661 $10,681 $10,509 
Revenues by Geography(1)
Asia Pacific$5,340 $5,198 $5,060 
Americas4,694 3,656 3,583 
EMEA1,627 1,827 1,866 
Total$11,661 $10,681 $10,509 

(1) Revenue is attributed to these indemnification obligations.

Product Warranty

The Company estimates probable product warranty costs at the time revenue is recognized. The Company generally provides warrantycountries based on its products for a period of 1 to 5 years. The Company’s warranty provision considers estimated product failure rate and trends, estimated repair and replacement cost, and uses statistical modeling to estimate product return rates in order to determine its warranty obligation. As of June 28, 2019, the Company’s reserve for product warranty was $195 million as compared to $237 million as of June 29, 2018. This decrease of $42 million was primarily driven by a continued decline in cost to repair and a decrease in the Company’s warranty return rate as compared to prior year.

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bill from locations.

Changes in the Company’s product warranty liability during the fiscal years ended June 28, 2019, June 29, 2018 and June 30, 2017 were as follows:

   Fiscal Years Ended 

(Dollars in millions)

  June 28,
2019		   June 29,
2018		   June 30,
2017		 

Balance, beginning of period

  $237   $233   $206 

Warranties issued

   112    147    131 

Repairs and replacements

   (99)    (106)    (114) 

Changes in liability forpre-existing warranties, including expirations

   (55)    (37)    10 
  

 

 

   

 

 

   

 

 

 

Balance, end of period

  $195   $237   $233 
  

 

 

   

 

 

   

 

 

 

17.

Subsequent Events

18.Subsequent Events

Dividend Declared

On July 30, 2019,21, 2022, the Company’s Board of Directors declared a quarterly cash dividend of $0.63$0.70 per share, which will be payable on October 9, 20195, 2022 to shareholders of record as of the close of business on September 25, 2019.

Sale21, 2022.


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Table of Certain Property

In July 2019, the Company sold certain property in Asia previously classified as held for sale land and building of $23 million at June 28, 2019. No additional impairment loss or gain was incurred in the first quarter of fiscal year 2020.

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Contents

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


To the Shareholders and the Board of Directors of Seagate Technology Holdings public limited company


Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Seagate Technology Holdings public limited company (plc) (the Company) as of June 28, 2019July 1, 2022 and June 29, 2018,July 2, 2021, the related consolidated statements of operations, comprehensive income, shareholders’ equity and cash flows for each of the three years in the period ended June 28, 2019,July 1, 2022, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at June 28, 2019July 1, 2022 and June 29, 2018,July 2, 2021, and the results of its operations and its cash flows for each of the three years in the period ended June 28, 2019,July 1, 2022, in conformity with U.S. generally accepted accounting principles.


We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’sCompany's internal control over financial reporting as of June 28, 2019,July 1, 2022, based on criteria established in Internal Control—Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated August 2, 20195, 2022 expressed an unqualified opinion thereon.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.


We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.


Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Revenue recognition—Sales incentive program rebates and discounts
Description of the Matter
The Company sells its products to original equipment manufacturers, distributors and retailers (collectively, “customers”). As explained in Note 1 to the consolidated financial statements, the Company reduces revenue for estimated future reductions to the final selling prices for shipped products including sales incentive programs, such as price protection and volume incentives.
Auditing management’s estimates of future reductions to the final selling prices is complex as it requires management to make subjective assumptions including the amount of price adjustments on products as well as the timing of its channel sales of products through to end customers.
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How We Addressed the Matter in Our AuditWe obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the completeness of sales incentive programs, the accuracy and completeness of the underlying data used in the calculations and management’s assumptions of the amount of future reductions to the final selling prices as well as the timing of its channel sales of products through to end customers.
To test the estimated sales incentive programs, our audit procedures included, among others, testing the completeness of sales incentive programs as well as the accuracy and completeness of the underlying data used in the calculations and evaluating the significant assumptions used by management to estimate its reserves related to remaining channel inventory. To test the completeness of the sales incentive programs, we inspected significant new sales contracts and agreements that include the contractual rights to discounts and rebates to validate they are being properly considered in the incentives reserve calculations and examined credit memos issued after year end. We also directly confirmed terms and conditions of agreements with a sample of the Company’s customers as well as inquired of sales representatives and other members of management to assess whether all contractual terms were provided to the Finance Department. To test the underlying data used in the sales incentive program reserve calculations, we confirmed ending on hand inventory at a sample of distributors and retailers. To test management’s assumptions of the amount of future reductions to the final selling prices as well as the timing of its distributors’ sales of products through to end customers we inquired with operations management and compared estimates with industry and analysts’ forecasts. In addition, we performed a retrospective review comparing prior period assumptions to the actual results in subsequent periods and performed sensitivity analyses to evaluate the potential effect of changes in the Company's significant assumptions.
Realizability of deferred income taxes
Description of the MatterAt July 1, 2022, the Company had gross deferred tax assets of $1,561 million, partially offset by a valuation allowance of $434 million. As discussed in Note 5 to the consolidated financial statements, the Company recognizes a valuation allowance to reduce the carrying value of its deferred tax assets to the amount that management believes is more likely than not to be realized.
Auditing the realizability of the deferred tax assets was complex as the assessment process includes forecasting future sources of taxable income and scheduling the use of the applicable deferred tax assets which includes subjective management assumptions, and the amounts involved are material to the financial statements as a whole.
How We Addressed the Matter in Our AuditWe obtained an understanding, evaluated the design and tested the operating effectiveness of controls that address the risks of material misstatement relating to the realizability of deferred tax assets. This included controls over management’s determination of sources and amount of future taxable income including income from operations and scheduling of the future reversal of existing taxable temporary differences.
Among other audit procedures performed, we evaluated the assumptions used by the Company to develop projections of future taxable income by jurisdiction and tested the completeness and accuracy of the underlying data used in its projections. For example, we compared the projections of future taxable income with the actual results of prior periods, as well as management’s consideration of current industry and economic trends. We also assessed the historical accuracy of management’s projections and compared the projections of future taxable income with other forecasted financial information prepared by the Company. In addition, we tested the Company’s scheduling of the reversal of existing temporary taxable differences.

/s/ Ernst & Young LLP


We have served as the Company’s auditor since 1980.

San Jose, California

August 2, 2019

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5, 2022


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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholdersshareholders and the Board of Directors of Seagate Technology Holdings public limited company


Opinion on Internal Control Over Financial Reporting

We have audited Seagate Technology Holdings public limited company (plc)’scompany’s internal control over financial reporting as of June 28, 2019,July 1, 2022, based on criteria established in Internal Control—Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Seagate Technology Holdings public limited company (plc) (the Company) maintained, in all material respects, effective internal control over financial reporting as of June 28, 2019,July 1, 2022, based on the COSO criteria.


We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of June 28, 2019July 1, 2022 and June 29, 2018,July 2, 2021, and the related consolidated statements of operations, comprehensive income, shareholders’ equity and cash flows for each of the three years in the period ended June 28, 2019July 1, 2022 and the related notes and our report dated August 2, 20195, 2022 expressed an unqualified opinion thereon.


Basis for Opinion

The Company’sCompany's management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.


We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.


Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.


Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.


Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.


/s/ Ernst & Young LLP


San Jose, California

August 2, 2019

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SUPPLEMENTARY FINANCIAL DATA (UNAUDITED)

For quarterly financial data see “Part II, Item 6. Selected Financial Data.”

ITEM 9.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

ITEM 9.CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
Not applicable.

ITEM 9A.

CONTROLS AND PROCEDURES

ITEM 9A.CONTROLS AND PROCEDURES
Conclusions Regarding Disclosure Controls and Procedures

Our chief executive officer and our chief financial officer have concluded, based on the evaluation of the effectiveness of our disclosure controls and procedures (as defined inRules 13a-15(e) and15d-15(e) of the Securities Exchange Act of 1934, as amended) by our management, with the participation of our chief executive officer and our chief financial officer, that our disclosure controls and procedures were effective as of June 28, 2019.

July 1, 2022.

Management’s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined inRules 13a-15(f) and15d-15(f) under the Securities Exchange Act of 1934, as amended). Under the supervision and with the participation of our management, including our chief executive officer and chief financial officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, or COSO.

Based on our evaluation under the 2013 framework inInternal Control—Integrated Framework, our management has concluded that our internal control over financial reporting was effective as of June 28, 2019.July 1, 2022. The effectiveness of our internal control over financial reporting as of June 28, 2019July 1, 2022 has been audited by Ernst & Young LLP, the independent registered public accounting firm that audited our financial statements included in this Annual Report on Form10-K, as stated in their report that is included herein.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during our fourth fiscal quarter that have materially affected, or were reasonably likely to materially affect, our internal control over financial reporting.

Limitations on the Effectiveness of Controls

Our management, including our chief executive officer and chief financial officer, does not expect that our disclosure controls and procedures or our internal controls will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Our disclosure controls and procedures and our internal controls have been designed to provide reasonable assurance of achieving their objectives. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within Seagate have been detected. An evaluation was performed under the supervision and with the participation of our management, including our chief executive officer and chief financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of June 28, 2019.July 1, 2022. Based on that evaluation, our management, including our chief executive officer and chief financial officer, concluded that our disclosure controls and procedures were effective at the reasonable assurance level.

ITEM 9B.

OTHER INFORMATION

ITEM 9B.OTHER INFORMATION
Not applicable.

Seagate Technology public limited company | 2019 Form 10-K | 95

ITEM 9C.DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS.
Not applicable.
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PART III

ITEM 10.

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

ITEM 10.DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
The information regarding our directors and compliance with Section 16(a) of the Securities Exchange Act of 1934, as amended, set forth in the sections entitled “Proposal 1—Election of Directors,” “Corporate Governance” and “Section“Delinquent Section 16(A) Beneficial Ownership Reporting Compliance,Reports,” in our Proxy Statement to be filed with the SEC within 120 days of the end of our fiscal year pursuant to General Instruction G(3) toForm 10-K are hereby incorporated by reference in this section. In addition, the information set forth in Part I of this report under “Item 1. Business—Executive Officers”Officers” is also incorporated by reference in this section.

We have adopted a Code of Ethics that applies to the Chief Executive officer,Officer, the Chief Financial Officer, and the principal accounting officer or controller or persons performing similar functions. This Code of Ethics is available on our Websitewebsite. The Internet address for our website is www.seagate.com, and the Code of Ethics may be found atwww.seagate.com/investors/governance/code-of-ethics/.

from our main web page by clicking first on “Investors,” next on “Governance” and then on “Code of Ethics.”

We intend to satisfy any disclosure requirements under Item 5.05 ofForm 8-K regarding an amendment to, or waiver from, a provision of this Code of Ethics by posting such information on our Websitewebsite in the location specified above for the Code of Ethics.

ITEM 11.

EXECUTIVE COMPENSATION

ITEM 11.EXECUTIVE COMPENSATION
The information regarding executive compensation required by this Item 11 set forth in the section entitled “Compensation of Named Executive Officers” in our Proxy Statement to be filed with the SEC within 120 days of the end of our fiscal year pursuant to General Instruction G(3) toForm 10-K is hereby incorporated by reference in this section.

ITEM 12.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

ITEM 12.SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The information regarding security ownership beneficial owners and management and related shareholders and equity compensation plans required by this Item 12 set forth in the sections entitled “Security Ownership of Certain Beneficial Owners and Management” and “Equity Compensation Plan Information,” respectively, in our Proxy Statement to be filed with the SEC within 120 days of the end of our fiscal year pursuant to General Instruction G(3) toForm 10-K is hereby incorporated by reference in this section.

section.
ITEM 13.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

ITEM 13.CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
The information regarding certain relationships, related transactions and director independence required by this Item 13 set forth in the section entitled “Certain Relationships and Related Transactions” in our Proxy Statement to be filed with the SEC within 120 days of the end of our fiscal year pursuant to General Instruction G(3) toForm 10-K is hereby incorporated by reference in this section.

ITEM 14.

PRINCIPAL ACCOUNTANT FEES AND SERVICES

ITEM 14.PRINCIPAL ACCOUNTANT FEES AND SERVICES
The information regarding principal accountant fees and services required by this Item 14 set forth in the section entitled “Fees of theto Independent Auditors” in our Proxy Statement to be filed with the SEC within 120 days of the end of our fiscal year pursuant to General Instruction G(3) toForm 10-K is hereby incorporated by reference in this section.

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PART IV

ITEM 15.

EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a)

The following documents are filed as part of this Report:

ITEM 15EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a)The following documents are filed as part of this Report:
1.Financial Statements. The following Consolidated Financial Statements of Seagate Technology Holdings plc and Report of Independent Registered Public Accounting Firm are included in Item 8:

Page No.

50

51

52

53

54

55

93
87

2.Financial Statement Schedules. All schedules are omitted because they are not applicable or the required information is included in the Financial Statements or in the notes thereto.

(b)

Exhibits.The following exhibits, as required by Item 601 of RegulationS-K are attached or incorporated by reference as stated below.

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(b)Exhibits. The following exhibits, as required by Item 601 of Regulation S-K are attached or incorporated by reference as stated below.

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EXHIBIT INDEX

      

Incorporated by Reference

    

Exhibit No.

  

Exhibit Description

  Form  File No.   Exhibit   Filing Date   Filed
Herewith
    2.1  Scheme of Arrangement among Seagate Technology, Seagate Technology  plc and the Scheme Shareholders (incorporated by reference to Annex A to Seagate Technology’s Definitive Proxy Statement on Schedule 14A filed on March 5, 2010)  DEF 14A   001-31560    Annex A    3/5/2010   
    3.1  Constitution of Seagate Technology public limited company as amended and restated by Special Resolution dated October 19, 2016  8-K   001-31560    3.1    10/24/2016   
    3.2  Certificate of Incorporation of Seagate Technology plc  10-K   001-31560    3.2    8/20/2010   
    4.1  Description of Securities          X
    4.2  Specimen Ordinary Share Certificate  10-K   001-31560    4.1    8/20/2010   
    4.3  First Supplemental Indenture, dated as of March  1, 2010, among Seagate Technology International, Seagate HDD Cayman and U.S. Bank National Association, as trustee, amending and supplementing the Indenture, dated as of September  20, 2006, among Seagate Technology HDD Holdings, Seagate Technology and U.S. Bank National Association, as trustee  8-K   001-31560    10.2    3/3/2010   
    4.4  Indenture dated as of May  13, 2010, among Seagate HDD Cayman, as Issuer, Seagate Technology, as Guarantor, and Wells Fargo Bank, National Association, as trustee  8-K   001-31560    4.1    5/14/2010   
    4.5  Form of 6.875% Senior Notes due 2020 of Seagate HDD Cayman  8-K   001-31560    4.1    5/14/2010   
    4.6  Registration Rights Agreement dated as of May  13, 2010, among Seagate HDD Cayman, Seagate Technology and Morgan Stanley & Co. Incorporated and Bank of America Securities LLC  8-K   001-31560    4.3    5/14/2010   
    4.7  Supplemental Indenture, dated as of July  3, 2010, among Seagate HDD Cayman, as issuer, Seagate Technology, as original guarantor, Seagate Technology plc, as successor guarantor, and Wells Fargo Bank, National Association, as trustee, amending and supplementing the Indenture, dated as of May 13, 2010, among Seagate HDD Cayman, as issuer, Seagate Technology, as guarantor, and Wells Fargo Bank, National Association, as trustee  8-K   001-31560    10.1    7/6/2010   

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  Incorporated by Reference 
Exhibit
No.		Exhibit DescriptionFormFile No.ExhibitFiling
Date
Filed
Herewith
2.1 DEF M14A001-31560Annex A3/3/2021 
3.1 10-K001-315603.18/6/2021
3.2 S-8001-315604.110/20/2021 
4.1 10-K001-315604.18/6/2021
4.2 10-K001-315604.28/6/2021
4.3 8-K001-315604.15/22/2013
4.3(a)8-K12B001-3156010.35/19/2021
4.4 8-K001-315604.15/22/2013
4.5 

8-K001-315604.35/22/2013
4.6 

8-K001-315604.15/28/2014
4.6(a)8-K12B001-3156010.45/19/2021
4.7 8-K001-315604.15/28/2014
4.8 

8-K001-315604.35/28/2014
4.9 8-K001-315604.112/2/2014
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Incorporated by Reference

    

Exhibit No.

  

Exhibit Description

  Form  File No.   Exhibit   Filing Date   Filed
Herewith
    4.8  Indenture dated as of May 18, 2011, among Seagate HDD  Cayman, as Issuer, Seagate Technology plc, as Guarantor, and Wells Fargo Bank, National Association, as trustee  8-K   001-31560    4.1    5/18/2011   
    4.9  Form of 7.000% Senior Note due 2021  8-K   001-31560    4.1    5/18/2011   
    4.10  Registration Rights Agreement dated as of May 18, 2011, among Seagate HDD  Cayman, Seagate Technology plc and Morgan Stanley & Co. Incorporated  8-K   001-31560    4.3    5/18/2011   
    4.11  Indenture dated as of May 22, 2013, among Seagate HDD  Cayman, as Issuer, Seagate Technology plc, as Guarantor, and U.S. Bank National Association, as trustee  8-K   001-31560    4.1    5/22/2013   
    4.12  Form of 4.75% Senior Note due 2023  8-K   001-31560    4.1    5/22/2013   
    4.13  Registration Rights Agreement dated as of May  22, 2013, among Seagate HDD Cayman, Seagate Technology plc and Morgan Stanley & Co. LLC  8-K   001-31560    4.3    5/22/2013   
    4.14  Indenture dated as of November 5, 2013, among Seagate HDD  Cayman, as Issuer, Seagate Technology plc, as Guarantor, and U.S. Bank National Association, as trustee  8-K   001-31560    4.1    11/5/2013   
    4.15  Form of 3.75% Senior Note due 2018  8-K   001-31560    4.1    11/5/2013   
    4.16  Registration Rights Agreement dated as of November  5, 2013, among Seagate HDD Cayman, Seagate Technology plc and Morgan Stanley & Co. LLC  8-K   001-31560    4.3    11/5/2013   
    4.17  Indenture dated as of May 28, 2014, among Seagate HDD  Cayman, as Issuer, Seagate Technology plc, as Guarantor and U.S. Bank National Association, as trustee  8-K   001-31560    4.1    5/28/2014   
    4.18  Form of 4.75% Senior Note due 2025  8-K   001-31560    4.1    5/28/2014   
    4.19  Registration Rights Agreement dated as of May  28, 2014, among Seagate HDD Cayman, Seagate Technology plc and Morgan Stanley & Co. LLC  8-K   001-31560    4.3    5/28/2014   
    4.20  Indenture dated as of December  2, 2014, among Seagate HDD Cayman, as issuer, Seagate Technology plc, as guarantor and U.S. Bank National Association, as trustee.  8-K   001-31560    4.1    12/2/2014   
    4.21  Form of 5.75% Senior Note due 2034  8-K   001-31560    4.1    12/2/2014   
    4.22  Registration Rights Agreement dated as of December  2, 2014, among Seagate HDD Cayman, Seagate Technology plc and Morgan Stanley & Co. LLC  8-K   001-31560    4.3    12/2/2014   

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  Incorporated by Reference 
Exhibit
No.		Exhibit DescriptionFormFile No.ExhibitFiling
Date
Filed
Herewith
4.9(a)8-K12B001-3156010.55/19/2021
4.10 8-K001-315604.112/2/2014
4.11 8-K001-315604.312/2/2014
4.12 

8-K001-31560
4.12/3/2017
4.12(a)8-K12B001-3156010.75/19/2021
4.13 8-K001-315604.12/3/2017
4.14 8-K001-315604.52/3/2017
4.15 8-K001-31560
4.32/3/2017


4.15(a)8-K12B001-3156010.65/19/2021
4.16 8-K001-315604.32/3/2017
4.17 8-K001-31560
4.62/3/2017


4.18 8-K001-31560
4.15/14/2015
4.18(a)8-K12B001-3156010.85/19/2021

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Incorporated by Reference

    

Exhibit No.

  

Exhibit Description

  Form  File No.   Exhibit   Filing Date   Filed
Herewith
    4.23  Indenture for the 2022 Notes, dated as of February  3, 2017, among Seagate HDD Cayman, as Issuer, Seagate Technology plc, as Guarantor, and Wells Fargo Bank, National Association, as trustee  8-K   001-31560    4.1    2/3/2017   
    4.24  Form of 4.250% Senior Note due 2022  8-K   001-31560    4.1    2/3/2017   
    4.25  Indenture for the 2024 Notes, dated as of February  3, 2017, among Seagate HDD Cayman, as Issuer, Seagate Technology plc, as Guarantor, and Wells Fargo Bank, National Association, as trustee  8-K   001-31560    4.3    2/3/2017   
    4.26  Form of 4.875% Senior Note due 2024  8-K   001-31560    4.3    2/3/2017   
    4.27  Registration Rights Agreement for the 2022 Notes, dated as of February  3, 2017, among Seagate HDD Cayman, Seagate Technology plc and Morgan Stanley & Co. LLC  8-K   001-31560    4.5    2/3/2017   
    4.28  Registration Rights Agreement for the 2024 Notes, dated as of February  3, 2017, among Seagate HDD Cayman, Seagate Technology plc and Morgan Stanley & Co. LLC  8-K   001-31560    4.6    2/3/2017   
    4.29  Indenture dated as of May  14, 2015, among Seagate HDD Cayman, as Issuer, Seagate Technology plc, as Guarantor, and Wells Fargo Bank, National Association, as trustee  8-K   001-31560    4.1    5/14/2015   
    4.30  Form of 4.875% Senior Note due 2027  8-K   001-31560    4.1    5/14/2015   
    4.31  Registration Rights Agreement dated as of May  14, 2015 among Seagate HDD Cayman, Seagate Technology plc and Morgan Stanley & Co. LLC  8-K   001-31560    4.3    5/14/2015   
  10.1+  Amended Seagate Technology plc 2001 Share Option Plan  10-K   001-31560    10.2    8/20/2010   
  10.2+  Seagate Technology  plc 2001 Share Option Plan Form of Notice of Stock Option Grant and Option Agreement (includes Compensation Recovery Policy)  10-K   001-31560    10.3    8/20/2010   
  10.3+  Amended Seagate Technology plc 2004 Share Compensation Plan  10-K   001-31560    10.6    8/20/2010   
  10.4+  Seagate Technology 2004 Stock Compensation Plan Form of Option Agreement (For Outside Directors)  10-Q   001-31560    10.7    11/4/2009   
  10.5+  Seagate Technology plc 2004 Share Compensation Plan Form of Notice of Stock Option Grant and Option Agreement (includes Compensation Recovery Policy)  10-K   001-31560    10.13    8/20/2010   

Seagate Technology public limited company | 2019 Form 10-K | 100

  Incorporated by Reference 
Exhibit
No.		Exhibit DescriptionFormFile No.ExhibitFiling
Date
Filed
Herewith
4.19 8-K001-315604.15/14/2015
4.20 8-K001-31560
4.35/14/2015
4.21 8-K001-315604.16/11/2020
4.21(a)8-K12B001-3156010.95/19/2021
4.22 8-K001-315604.16/11/2020
4.23 8-K001-315604.36/11/2020
4.24 8-K001-315604.16/18/2020
4.24(a)8-K12B001-3156010.105/19/2021
4.25 8-K001-315604.16/18/2020
4.26 8-K001-315604.36/18/2020
4.27 8-K001-315604.112/9/2020
4.27(a)8-K12B001-3156010.125/19/2021
4.28 8-K001-315604.112/9/2020
4.29 8-K001-315604.312/9/2020

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  Incorporated by Reference 
Exhibit
No.		Exhibit DescriptionFormFile No.ExhibitFiling
Date
Filed
Herewith
4.30 8-K001-315604.412/9/2020
4.30(a)8-K12B001-3156010.115/19/2021
4.31 8-K001-315604.412/9/2020
4.32 8-K001-315604.612/9/2020
10.1+10-Q001-3156010.410/27/2017 
10.2+10-Q001-3156010.41/26/2017 
10.3+10-Q001-3156010.31/26/2017 
10.4+10-Q001-3156010.21/26/2017 
10.5+10-Q001-3156010.11/26/2017 
10.6+8-K001-3156010.110/18/2017 
10.7+10-Q001-3156010.11/29/2016
10.8+10-Q001-3156010.31/30/2015 
10.8(a)+10-Q001-3156010.110/30/2015 
10.8(b)+10-K001-3156010.16(b)8/2/2019
10.8(c)+10-Q001-3156010.62/4/2019 
10.8(d)+10-Q001-3156010.12/5/2020
10.8(e)+10-Q001-3156010.21/28/2021
10.9+10-K001-3156010.178/2/2019
10.9(a)+10-Q001-3156010.265/5/2010 
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  Incorporated by Reference 
Exhibit
No.		Exhibit DescriptionFormFile No.ExhibitFiling
Date
Filed
Herewith
10.9(b)+10-Q001-3156010.215/3/2011 
10.9(c)+10-Q/A001-3156010.561/31/2013 
10.9(d)+10-Q001-3156010.41/30/2015
10.9(e)+10-Q001-3156010.72/4/2019
10.9(f)+10-K001-3156010.17(f)8/7/2020
10.9(g)+10-Q001-3156010.31/28/2021
10.10+10-Q001-3156010.274/30/2012
10.10(a)+10-Q001-3156010.42/4/2019
10.10(b)+10-K001-3156010.18(b)8/7/2020
10.11+10-Q001-3156010.285/5/2010
10.11(a)+10-Q001-3156010.52/4/2019
10.11(b)+10-K001-3156010.19(b)+8/7/2020
10.12+8-K001-3156010.111/4/2013
10.13+10-K001-3156010.138/6/2021
10.14 10-Q001-3156010.4(b)5/6/2009 
10.15 8-K001-3156010.27/6/2010
10.16 10-Q001-3156010.310/27/2017
10.17+10-Q001-3156010.32/4/2019
10.18+10-Q001-3156010.14/28/2022
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  Incorporated by Reference 
Exhibit
No.		Exhibit DescriptionFormFile No.ExhibitFiling
Date
Filed
Herewith
10.19 10-Q001-3156010.14/30/2019
10.20 10-Q001-3156010.24/30/2019
10.20(a)10-Q001-3156010.51/28/2021
10.21 10-Q001-3156010.34/30/2019
10.22 10-Q001-3156010.111/1/2019
10.22(a)10-Q001-3156010.211/1/2019
10.22(b)10-Q001-3156010.41/28/2021
10.22(c)8-K001-3156010.15/19/2021
10.22(d)10-Q001-3156010.610/28/2021
10.23 8-K12B001-3156010.25/19/2021
10.24+8-K001-3156010.111/4/2019
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Incorporated by Reference

Exhibit No.

Exhibit Description

FormFile No.ExhibitFiling DateFiled
Herewith
  10.6+Seagate Technology plc 2004 Share Compensation Plan Form of Notice of Performance Share Bonus Grant and Agreement (includes Compensation Recovery Policy)10-KIncorporated by Reference001-3156010.168/20/2010
Exhibit
No.		Exhibit DescriptionFormFile No.ExhibitFiling
Date
Filed
Herewith
  10.7+Seagate Technology plc 2004 Share Compensation Plan Form of Restricted Share Unit Agreement (includes Compensation Recovery Policy)10-Q001-3156010.1911/3/2010
10.25+
  10.8+10-Q001-3156010.5610/27/2011
  10.9+Amended and Restated Seagate Technology plc 2012 Equity Incentive Plan as amended and restated on October 19, 201610-Q001-3156010.410/27/2017
  10.10+Form of Outside Directors Restricted Share Unit Agreement for Seagate Technology public limited company pursuant to the 2012 Equity Incentive Plan10-Q001-3156010.41/26/2017
  10.11+Revised Form of Executive Performance Unit Agreement for Seagate Technology public limited company pursuant to the 2012 Equity Incentive Plan (for awards granted after January 2020)10-Q001-3156010.31/26/2017
10-K001-3156010.358/7/2020
  10.12+10.26+10-Q001-3156010.21/26/2017
10-K001-3156010.368/7/2020
  10.13+10.27+10-Q001-3156010.11/26/2017
10-K001-3156010.378/7/2020
  10.14+10.28+10-K001-3156010.388/7/2020
10.29+10-Q001-3156010.34/29/2021
10.30+8-K12B001-3156010.185/19/2021
10.31+8-K12B001-3156010.145/19/2021
10.32+8-K12B001-3156010.155/19/2021
10.33+8-K12B001-3156010.165/19/2021
10.34+8-K12B001-3156010.175/19/2021
10.35+8-K001-3156010.110/18/2017
8-K12B001-3156010.205/19/2021
  10.15+Dot Hill Systems Corp. 2009 Equity Incentive Plan, as amended, as assumed by Seagate Technology public limited company10-Q001-3156010.11/29/2016
  10.16+2015 Seagate Deferred Compensation Plan10-Q001-3156010.31/30/2015
  10.16(a)+First Amendment to the 2015 Seagate Deferred Compensation Plan10-Q001-3156010.110/30/2015
  10.16(b)+Second Amendment to the 2015 Seagate Deferred Compensation PlanX
  10.16(c)+Third Amendment to the 2015 Seagate Deferred Compensation Plan10-Q001-3156010.62/4/2019
  10.17+Seagate 2009 Deferred Compensation PlanX
  10.17(a)+First Amendment to 2009 Seagate Deferred Compensation Plan10-Q001-3156010.265/5/2010

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Incorporated by Reference

    

Exhibit No.

 

Exhibit Description

  Form  File No.   Exhibit  Filing Date   Filed
Herewith
  10.17(b)+ Second Amendment to 2009 Seagate Deferred Compensation Plan  10-Q   001-31560    10.21   5/3/2011   
  10.17(c)+ Third Amendment to 2009 Seagate Deferred Compensation Plan  10-Q/A   001-31560    10.56   1/31/2013   
  10.17(d)+ Fourth Amendment to 2009 Seagate Deferred Compensation Plan  10-Q   001-31560    10.4   1/30/2015   
  10.17(e)+ Fifth Amendment to 2009 Seagate Deferred Compensation Plan  10-Q   001-31560    10.7   2/4/2019   
  10.18+ 2010 Restated Seagate Deferred Compensation Plan  10-Q   001-31560    10.27   5/5/2010   
  10.18(a)+ First Amendment to the 2010 Restated Seagate Deferred Compensation Plan  10-Q   001-31560    10.4   2/4/2019   
  10.19+ Seagate Deferred CompensationSub-Plan  10-Q   001-31560    10.28   5/5/2010   
  10.19(a)+ First Amendment to the Seagate Deferred CompensationSub-Plan  10-Q   001-31560    10.5   2/4/2019   
  10.20+ Seagate Technology plc Amended and Restated Executive Officer Performance Bonus Plan  8-K   001-31560    10.1   11/4/2013   
  10.21+ Fifth Amended and Restated Seagate Technology Executive Severance and Change in Control Plan  10-K   001-31560    10.1   8/8/2014   
  10.22+ Summary description of Seagate Technology plc’s Compensation Policy forNon-Management Members of the Board of Directors with an Effective date of October 30, 2013  10-K   001-31560    10.46   8/8/2013   
  10.23+ Offer Letter, dated as of January  29, 2009, by and between Seagate Technology and Stephen J. Luczo  10-Q   001-31560    10.20   2/10/2009   
  10.24+ Offer letter, dated as of July  30, 2014, by and between Seagate US LLC and Philip Brace  8-K   001-31560    10.1   7/22/2015   
  10.25+ Memo Agreement with Albert A. “Rocky” Pimentel dated January 27, 2016  10-Q   001-31560    10.2   1/29/2016   
  10.26+ James J. Murphy Employee Relocation Assistance Lump Sum Repayment Agreement  10-Q   001-31560    10.1   10/27/2017   
  10.27 Form of Revised Indemnification Agreement between Seagate Technology and the director or officer named therein  10-Q   001-31560    10.4(b)   5/6/2009   
  10.28 Second Priority Mortgage of Shares in Seagate Technology, dated March  1, 2010, between Seagate Technology plc, as mortgagor, and Wells Fargo Bank, National Association, as mortgagee  8-K   001-31560    10.23   3/3/2010   

Seagate Technology public limited company | 2019 Form 10-K | 102

  Incorporated by Reference 
Exhibit
No.		Exhibit DescriptionFormFile No.ExhibitFiling
Date
Filed
Herewith
10.36 8-K12B001-3156010.135/19/2021
10.37+8-K12B001-3156010.195/19/2021
10.38+10-K001-3156010.378/6/2021
10.39+10-Q001-3156010.24/28/2022
10.40+10-Q001-3156010.34/28/2022
10.41+S-8001-3156010.110/20/2021
10.42+S-8001-3156010.210/20/2021
10.43+S-8001-3156010.510/20/2021
10.44+S-8001-3156010.410/20/2021
10.45+X
21.1  X
23.1  X
24.1   X
31.1  X
31.2     X

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Incorporated by Reference

    

Exhibit No.

  

Exhibit Description

  Form  File No.   Exhibit   Filing Date   Filed
Herewith
  10.29  Deed Poll of Assumption by Seagate Technology plc, dated July 2, 2010  8-K   001-31560    10.2    7/6/2010   
  10.30  Credit Agreement, dated as of January  18, 2011, among Seagate Technology public limited company, Seagate HDD Cayman, as Borrower, the lending institutions thereto, the Bank of Nova Scotia, as administrative agent, Morgan Stanley Senior Funding, Inc., Merrill Lynch Pierce Fenner and Smith Incorporated and BNP Paribas as Syndication Agents, and Wells Fargo Bank, National Association, as Documentation Agent  10-Q   001-31560    10.47    2/3/2011   
  10.30(a)  First Amendment, dated August  31, 2011, to the Credit Agreement, dated as of January 18, 2011  10-Q   001-31560    10.1    5/1/2018   
  10.30(b)  Second Amendment, dated April  30, 2013, to the Credit Agreement, dated as of January 18, 2011  10-Q   001-31560    10.1    5/2/2013   
  10.30(c)  Third Amendment, dated January  15, 2015, to the Credit Agreement, dated as of January 18, 2011  8-K   001-31560    10.1    1/16/2015   
  10.30(d)  Fourth Amendment, dated as of April  28, 2016, to the Credit Agreement, dated as of January 18, 2011  10-Q   001-31560    10.1    4/29/2016   
  10.31  U.S. Guarantee Agreement, dated as of January  18, 2011, among Seagate Technology public limited company, Seagate HDD Cayman, as Borrower, the Guarantors party thereto and The Bank of Nova Scotia, as Administrative Agent  10-Q   001-31560    10.48    2/3/2011   
  10.31(a)  First Amendment, dated as of April  30, 2013, to the U.S. Guarantee Agreement, dated as of January 18, 2011  10-Q   001-31560    10.2    5/2/2013   
  10.32  Supplement no. 1 dated February  7, 2012, to the U.S. Guarantee Agreement, dated as of January 18, 2011, among Seagate Technology public limited company, Seagate HDD Cayman, as Borrower, the Guarantors party thereto and The Bank of Nova Scotia, as Administrative Agent  10-K   001-31560    10.45    8/9/2012   
  10.33  Supplement no. 2 dated February  22, 2012, to the U.S. Guarantee Agreement, dated as of January 18, 2011, among Seagate Technology public limited company, Seagate HDD Cayman, as Borrower, the Guarantors party thereto, and The Bank of Nova Scotia, as Administrative Agent  10-K   001-31560    10.48    8/9/2012   

Seagate Technology public limited company | 2019 Form 10-K | 103

      

Incorporated by Reference

    

Exhibit No.

  

Exhibit Description

  Form  File No.   Exhibit   Filing Date   Filed
Herewith
  10.34  Supplement no. 3 dated March  19, 2012, to the U.S. Guarantee Agreement, dated as of January 18, 2011, among Seagate Technology public limited company, Seagate HDD Cayman, as Borrower, the Guarantors party thereto and The Bank of Nova Scotia, as Administrative Agent  10-K   001-31560    10.50    8/9/2012   
  10.35  U.S. Security Agreement, dated as of January  18, 2011, among Seagate Technology public limited company, Seagate HDD Cayman, as Borrower, the Grantor parties thereto and The Bank of Nova Scotia, as Administrative Agent  10-Q   001-31560    10.49    2/3/2011   
  10.36  U.S. Pledge Agreement, dated as of January  18, 2011, among Seagate Technology public limited company, Seagate HDD Cayman, as Borrower, the Pledgor parties thereto and The Bank of Nova Scotia, as Administrative Agent  10-Q   001-31560    10.50    2/3/2011   
  10.37  Indemnity, Subrogation and Contribution Agreement, dated as of January  18, 2011, among Seagate Technology public limited company, Seagate HDD Cayman, as Borrower, the Guarantors party thereto and The Bank of Nova Scotia, as Administrative Agent  10-Q   001-31560    10.52    2/3/2011   
  10.38  Supplement No. 1, dated February  7, 2012, to the Indemnity, Subrogation and Contribution Agreement, dated as of January  18, 2011, among Seagate Technology public limited company, Seagate HDD Cayman, as Borrower, the Guarantors party thereto and The Bank of Nova Scotia, as Administrative Agent  10-K   001-31560    10.46    8/9/2012   
  10.39  Supplement No. 2, dated February  22, 2012, to the Indemnity, Subrogation and Contribution Agreement, dated as of January  18, 2011, among Seagate Technology public limited company, Seagate HDD Cayman, as Borrower, the Guarantors party thereto and The Bank of Nova Scotia, as Administrative Agent  10-K   001-31560    10.49    8/9/2012   
  10.40  Supplement No. 3, dated March  19, 2012, to the Indemnity, Subrogation and Contribution Agreement, dated as of January  18, 2011, among Seagate Technology public limited company, Seagate HDD Cayman, as Borrower, the Guarantors party thereto and The Bank of Nova Scotia, as Administrative Agent  10-K   001-31560    10.51    8/9/2012   

Seagate Technology public limited company | 2019 Form 10-K | 104

      

Incorporated by Reference

    

Exhibit No.

  

Exhibit Description

  Form  File No.   Exhibit   Filing Date   Filed
Herewith
  10.41  September  26, 2017 Equity Commitment Letter entered into by Seagate Technology plc and a consortium of investors led by Bain Capital Private Equity for the acquisition of Toshiba Memory Corporation  10-Q   001-31560    10.3    10/27/2017   
  10.42+  Offer letter, dated July 25, 2017, by and between Seagate Technology and Steven  J. Luczo  10-K   001-31560    10.52    8/3/2018   
  10.43+  Letter Agreement, dated November  1, 2018 by and between Seagate Technology plc and Steven Luczo  10-Q   001-31560    10.1    11/2/2018   
  10.44+  Offer Letter, dated August  22, 2018 by and between Seagate US LLC and Geraldine Hottier-Fayon  10-Q   001-31560    10.1    2/4/2019   
  10.45+  Offer Letter, dated September  6, 2018 by and between Seagate US LLC and Katherine R. Scolnick  10-Q   001-31560    10.2    2/4/2019   
  10.46+  Offer Letter, dated December  3, 2018 by and between Seagate US LLC and Gianluca Romano  10-Q   001-31560    10.3    2/4/2019   
  10.47  Credit Agreement, dated as of February  20, 2019, by and among Seagate Technology public limited company, Seagate HDD Cayman, as the Borrower, the Lenders party thereto, The Bank of Nova Scotia, as Administrative Agent, Bank of America, N.A., BNP Paribas Securities Corp. and Morgan Stanley Senior Funding, Inc., as Syndication Agents, and MUFG Bank, Ltd. and Wells Fargo Bank, National Association, as Documentation Agents  10-Q   001-35160    10.1    4/30/2019   
  10.48  U.S. Guarantee Agreement, dated as of February  20, 2019, among Seagate Technology public limited company and the subsidiaries party thereto, as Guarantors, and The Bank of Nova Scotia, as Administrative Agent  10-Q   001-31560    10.2    4/30/2019   
  10.49  Indemnity, Subrogation and Contribution Agreement, dated as of February  20, 2019, among Seagate Technology public limited company, Seagate HDD Cayman, as the Borrower, the subsidiaries party thereto, as Guarantors, and The Bank of Nova Scotia, as Administrative Agent  10-Q   001-31560    10.3    4/30/2019   
  21.1  List of Subsidiaries          X
  23.1  Consent of Independent Registered Public Accounting Firm          X

Seagate Technology public limited company | 2019 Form 10-K | 105

Incorporated by Reference

Exhibit No.

Exhibit Description

FormFile No.ExhibitFiling DateFiled
Herewith
  24.1Power of Attorney (see signature page to this annual report)Incorporated by Reference
Exhibit
No.		Exhibit DescriptionFormFile No.ExhibitXFiling
Date
Filed
Herewith
32.1†
  31.1Certification of the Chief Executive Officer pursuant torules  13a-14(a) and15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002X
  31.2Certification of the Chief Financial Officer pursuant torules  13a-14(a) and15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002X
  32.1†X
101.INSInline XBRL Instance Document.X
101.INSXBRL Instance Document.101.SCHInline XBRL Taxonomy Extension Schema Document.X
101.SCH101.CALInline XBRL Taxonomy Extension SchemaCalculation Linkbase Document.X
101.CAL101.LABInline XBRL Taxonomy Extension CalculationLabel Linkbase Document.X
101.LAB101.PREInline XBRL Taxonomy Extension LabelPresentation Linkbase Document.X
101.PRE101.DEFInline XBRL Taxonomy Extension PresentationDefinition Linkbase Document.X
101.DEFXBRL Taxonomy Extension Definition Linkbase Document.104 Inline XBRL Cover Page contained in Exhibit 101X

+

Management contract or compensatory plan or arrangement.

†

The certifications attached as Exhibit 32.1 that accompany this Annual Report on Form___________________________________

+    Management contract or compensatory plan or arrangement.
†    The certifications attached as Exhibit 32.1 that accompany this Annual Report on Form 10-K, are not deemed filed with the Securities and Exchange Commission and are not to be incorporated by reference into any filing of Seagate Technology plc under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Form10-K, irrespective of any general incorporation language contained in such filing.

Seagate Technology public limited company | 2019Holdings plc under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Form 10-K, | 106

irrespective of any general incorporation language contained in such filing.


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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

SEAGATE TECHNOLOGY HOLDINGS PUBLIC LIMITED COMPANY

/s/ DR. WILLIAM D. MOSLEY

Date:August 2, 20195, 2022( (Dr. William D. Mosley, Chief Executive Officer and Director)


POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below hereby constitutes and appoints Dr. William D. Mosley, Gianluca Romano, and Katherine E. Schuelke, and each of them, as his/her true and lawfulattorneys-in-fact and agents, with power to act with or without the others and with full power of substitution and resubstitution, to do any and all acts and things and to execute any and all instruments which said attorneys and agents and each of them may deem necessary or desirable to enable the registrant to comply with the U.S. Securities Exchange Act of 1934, as amended, and any rules, regulations and requirements of the U.S. Securities and Exchange Commission thereunder in connection with the registrant’sregistrant's Annual Report onForm 10-K for the fiscal year ended June 28, 2019July 1, 2022 (the “Annual Report”"Annual Report"), including specifically, but without limiting the generality of the foregoing, power and authority to sign the name of the registrant and the name of the undersigned, individually and in his/her capacity as a director or officer of the registrant, to the Annual Report as filed with the U.S. Securities and Exchange Commission, to any and all amendments thereto, and to any and all instruments or documents filed as part thereof or in connection therewith; and each of the undersigned hereby ratifies and confirms all that said attorneys and agents and each of them shall do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature

Title

Title

Date

/s/ DR. WILLIAM D. MOSLEY

(William D. Mosley)

Chief Executive Officer and Director


(PrinciplePrincipal Executive Officer)

August 2, 20195, 2022
(Dr. William D. Mosley)

/s/ GIANLUCA ROMANO

(Gianluca Romano)

Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)August 5, 2022
(Gianluca Romano)
/s/ MICHAEL R. CANNONChairperson of the BoardAugust 2, 20195, 2022
(Michael R. Cannon)
/s/ YOLANDA L. CONYERSDirectorAugust 5, 2022
(Yolanda L. Conyers)
/s/ MARK W. ADAMSDirectorAugust 5, 2022
(Mark W. Adams)
/s/ SHANKAR ARUMUGAVELUDirectorAugust 5, 2022
(Shankar Arumugavelu)

/s/    STEPHEN J. LUCZO

(Stephen J. Luczo)

Chairman of the BoardAugust 2, 2019
/s/ PRAT BHATTDirectorAugust 5, 2022

/s/    MARK W. ADAMS

(Mark W. Adams)

DirectorAugust 2, 2019Prat Bhatt)

/s/ JUDY BRUNER

DirectorAugust 5, 2022
(Judy Bruner)

DirectorAugust 2, 2019

/s/    MICHAEL R. CANNON

(Michael R. Cannon)

DirectorAugust 2, 2019

/s/    WILLIAM T. COLEMAN III

(William T. Coleman III)

DirectorAugust 2, 2019

Seagate Technology public limited company | 2019 Form 10-K | 107

Signature

Title

Date

/s/ JAY L. GELDMACHER

DirectorAugust 5, 2022
(Jay L. Geldmacher)

DirectorAugust 2, 2019

/s/ DYLAN HAGGART

DirectorAugust 5, 2022
(Dylan Haggart)

DirectorAugust 2, 2019

/s/ STEPHANIE TILENIUS

DirectorAugust 5, 2022
(Stephanie Tilenius)

DirectorAugust 2, 2019

/s/ EDWARD J. ZANDER

DirectorAugust 5, 2022
(Edward J. Zander)

DirectorAugust 2, 2019

Seagate Technology public limited company | 2019 Form 10-K | 108

102