Cover Page
Cover Page - shares | 9 Months Ended | |
Apr. 01, 2022 | Apr. 27, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Apr. 1, 2022 | |
Document Transition Report | false | |
Entity File Number | 1-8703 | |
Entity Registrant Name | WESTERN DIGITAL CORPORATION | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 33-0956711 | |
Entity Address, Address Line One | 5601 Great Oaks Parkway | |
Entity Address, City or Town | San Jose, | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 95119 | |
City Area Code | 408 | |
Local Phone Number | 717-6000 | |
Title of 12(b) Security | Common Stock, $0.01 Par Value Per Share | |
Trading Symbol | WDC | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 313,167,818 | |
Entity Central Index Key | 0000106040 | |
Current Fiscal Year End Date | --07-01 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Apr. 01, 2022 | Jul. 02, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 2,505 | $ 3,370 |
Accounts receivable, net | 2,353 | 2,257 |
Inventories | 3,661 | 3,616 |
Other current assets | 659 | 514 |
Total current assets | 9,178 | 9,757 |
Non-current assets: | ||
Property, plant and equipment, net | 3,488 | 3,188 |
Notes receivable and investments in Flash Ventures | 1,417 | 1,586 |
Goodwill | 10,061 | 10,066 |
Other intangible assets, net | 252 | 442 |
Other non-current assets | 1,303 | 1,093 |
Total assets | 25,699 | 26,132 |
Current liabilities: | ||
Accounts payable | 1,836 | 1,934 |
Accounts payable to related parties | 396 | 398 |
Accrued expenses | 1,605 | 1,653 |
Accrued compensation | 485 | 634 |
Current portion of long-term debt | 75 | 251 |
Total current liabilities | 4,397 | 4,870 |
Non-current liabilities: | ||
Long-term debt | 7,087 | 8,474 |
Other liabilities | 2,231 | 2,067 |
Total liabilities | 13,715 | 15,411 |
Commitments and contingencies (Notes 10, 11, 13 and 16) | ||
Shareholders’ equity: | ||
Preferred stock, $0.01 par value; authorized — 5 shares; issued and outstanding — none | 0 | 0 |
Common stock, $0.01 par value; authorized — 450 shares; issued — 313 shares and 312 shares, respectively; outstanding — 313 shares and 308 shares, respectively | 3 | 3 |
Additional paid-in capital | 3,600 | 3,608 |
Accumulated other comprehensive loss | (357) | (197) |
Retained earnings | 8,738 | 7,539 |
Treasury stock — common shares at cost; 0 shares and 4 shares, respectively | 0 | (232) |
Total shareholders’ equity | 11,984 | 10,721 |
Total liabilities and shareholders’ equity | $ 25,699 | $ 26,132 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Apr. 01, 2022 | Jul. 02, 2021 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 5,000,000 | 5,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 450,000,000 | 450,000,000 |
Common stock, shares issued (in shares) | 313,000,000 | 312,000,000 |
Common stock, shares outstanding (in shares) | 313,000,000 | 308,000,000 |
Treasury stock (in shares) | 0 | 4,000,000 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Apr. 01, 2022 | Apr. 02, 2021 | Apr. 01, 2022 | Apr. 02, 2021 | |
Income Statement [Abstract] | ||||
Revenue, net | $ 4,381 | $ 4,137 | $ 14,265 | $ 12,002 |
Cost of revenue | 3,200 | 3,046 | 9,836 | 9,047 |
Gross profit | 1,181 | 1,091 | 4,429 | 2,955 |
Operating expenses: | ||||
Research and development | 572 | 555 | 1,725 | 1,645 |
Selling, general and administrative | 281 | 287 | 851 | 808 |
Employee termination, asset impairment, and other charges | 4 | (68) | 24 | (43) |
Total operating expenses | 857 | 774 | 2,600 | 2,410 |
Operating income | 324 | 317 | 1,829 | 545 |
Interest and other income (expense): | ||||
Interest income | 1 | 2 | 4 | 6 |
Interest expense | (75) | (81) | (229) | (246) |
Other income, net | 12 | 11 | 8 | 26 |
Total interest and other expense, net | (62) | (68) | (217) | (214) |
Income before taxes | 262 | 249 | 1,612 | 331 |
Income tax expense | 237 | 52 | 413 | 132 |
Net income | $ 25 | $ 197 | $ 1,199 | $ 199 |
Income per common share: | ||||
Basic (in dollars per share) | $ 0.08 | $ 0.64 | $ 3.84 | $ 0.65 |
Diluted (in dollars per share) | $ 0.08 | $ 0.63 | $ 3.79 | $ 0.65 |
Weighted average shares outstanding: | ||||
Basic (in shares) | 313 | 306 | 312 | 305 |
Diluted (in shares) | 316 | 313 | 316 | 308 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Apr. 01, 2022 | Apr. 02, 2021 | Apr. 01, 2022 | Apr. 02, 2021 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 25 | $ 197 | $ 1,199 | $ 199 |
Other comprehensive loss, before tax: | ||||
Actuarial pension gain | 1 | 2 | 2 | 4 |
Foreign currency translation adjustment | (82) | (95) | (123) | (29) |
Net unrealized loss on derivative contracts and available-for-sale securities | (74) | (84) | (51) | (34) |
Total other comprehensive loss, before tax | (155) | (177) | (172) | (59) |
Income tax benefit related to items of other comprehensive loss, before tax | 15 | 17 | 12 | 6 |
Other comprehensive loss, net of tax | (140) | (160) | (160) | (53) |
Total comprehensive income (loss) | $ (115) | $ 37 | $ 1,039 | $ 146 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 9 Months Ended | |
Apr. 01, 2022 | Apr. 02, 2021 | |
Cash flows from operating activities | ||
Net income | $ 1,199 | $ 199 |
Adjustments to reconcile net income to net cash provided by operations: | ||
Depreciation and amortization | 708 | 961 |
Stock-based compensation | 249 | 239 |
Deferred income taxes | 41 | (41) |
Gain on disposal of assets | (14) | (65) |
Amortization of debt discounts | 34 | 30 |
Other non-cash operating activities, net | 42 | (26) |
Changes in: | ||
Accounts receivable, net | (96) | 474 |
Inventories | (45) | (613) |
Accounts payable | (100) | (139) |
Accounts payable to related parties | (2) | (10) |
Accrued expenses | (48) | 251 |
Accrued compensation | (149) | 22 |
Other assets and liabilities, net | (234) | (378) |
Net cash provided by operating activities | 1,585 | 904 |
Cash flows from investing activities | ||
Purchases of property, plant and equipment | (842) | (820) |
Proceeds from the sale of property, plant and equipment | 13 | 121 |
Notes receivable issuances to Flash Ventures | (496) | (490) |
Notes receivable proceeds from Flash Ventures | 519 | 619 |
Strategic investments and other, net | (16) | 8 |
Net cash used in investing activities | (822) | (562) |
Cash flows from financing activities | ||
Issuance of stock under employee stock plans | 62 | 71 |
Taxes paid on vested stock awards under employee stock plans | (85) | (51) |
Repayment of debt | (5,575) | (673) |
Proceeds from debt | 3,998 | 0 |
Debt issuance costs | (23) | 0 |
Other | 0 | (9) |
Net cash used in financing activities | (1,623) | (662) |
Effect of exchange rate changes on cash | (5) | 6 |
Net decrease in cash and cash equivalents | (865) | (314) |
Cash and cash equivalents, beginning of year | 3,370 | 3,048 |
Cash and cash equivalents, end of period | 2,505 | 2,734 |
Supplemental disclosure of cash flow information: | ||
Cash paid for income taxes | 376 | 301 |
Cash paid for interest | $ 221 | $ 245 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY - USD ($) shares in Millions, $ in Millions | Total | Adoption of new accounting standards | Common Stock | Treasury Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Retained EarningsAdoption of new accounting standards |
Beginning balance (in shares) at Jul. 03, 2020 | 312 | 10 | ||||||
Beginning balance at Jul. 03, 2020 | $ 9,551 | $ (7) | $ 3 | $ (737) | $ 3,717 | $ (157) | $ 6,725 | $ (7) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income (loss) | (60) | (60) | ||||||
Employee stock plans (in shares) | 2 | |||||||
Employee stock plans | (40) | $ 216 | (256) | |||||
Stock-based compensation | 76 | 76 | ||||||
Actuarial pension gain | 1 | 1 | ||||||
Foreign currency translation adjustment | 32 | 32 | ||||||
Net unrealized gain (loss) on derivative contracts | 23 | 23 | ||||||
Ending balance (in shares) at Oct. 02, 2020 | 312 | 8 | ||||||
Ending balance at Oct. 02, 2020 | 9,576 | $ 3 | $ (521) | 3,537 | (101) | 6,658 | ||
Beginning balance (in shares) at Jul. 03, 2020 | 312 | 10 | ||||||
Beginning balance at Jul. 03, 2020 | 9,551 | $ (7) | $ 3 | $ (737) | 3,717 | (157) | 6,725 | $ (7) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income (loss) | 199 | |||||||
Ending balance (in shares) at Apr. 02, 2021 | 312 | 6 | ||||||
Ending balance at Apr. 02, 2021 | 9,949 | $ 3 | $ (364) | 3,603 | (210) | 6,917 | ||
Beginning balance (in shares) at Oct. 02, 2020 | 312 | 8 | ||||||
Beginning balance at Oct. 02, 2020 | 9,576 | $ 3 | $ (521) | 3,537 | (101) | 6,658 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income (loss) | 62 | 62 | ||||||
Employee stock plans (in shares) | 2 | |||||||
Employee stock plans | 60 | $ 131 | (71) | |||||
Stock-based compensation | 80 | 80 | ||||||
Actuarial pension gain | 1 | 1 | ||||||
Foreign currency translation adjustment | 34 | 34 | ||||||
Net unrealized gain (loss) on derivative contracts | 16 | 16 | ||||||
Ending balance (in shares) at Jan. 01, 2021 | 312 | 6 | ||||||
Ending balance at Jan. 01, 2021 | 9,829 | $ 3 | $ (390) | 3,546 | (50) | 6,720 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income (loss) | 197 | 197 | ||||||
Employee stock plans | 0 | $ 26 | (26) | |||||
Stock-based compensation | 83 | 83 | ||||||
Actuarial pension gain | 2 | 2 | ||||||
Foreign currency translation adjustment | (95) | (95) | ||||||
Net unrealized gain (loss) on derivative contracts | (67) | (67) | ||||||
Ending balance (in shares) at Apr. 02, 2021 | 312 | 6 | ||||||
Ending balance at Apr. 02, 2021 | 9,949 | $ 3 | $ (364) | 3,603 | (210) | 6,917 | ||
Beginning balance (in shares) at Jul. 02, 2021 | 312 | 4 | ||||||
Beginning balance at Jul. 02, 2021 | 10,721 | $ 3 | $ (232) | 3,608 | (197) | 7,539 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income (loss) | 610 | 610 | ||||||
Employee stock plans (in shares) | 3 | |||||||
Employee stock plans | (76) | $ 207 | (283) | |||||
Stock-based compensation | 76 | 76 | ||||||
Actuarial pension gain | 1 | 1 | ||||||
Foreign currency translation adjustment | 4 | 4 | ||||||
Net unrealized gain (loss) on derivative contracts | 25 | 25 | ||||||
Ending balance (in shares) at Oct. 01, 2021 | 312 | 1 | ||||||
Ending balance at Oct. 01, 2021 | 11,361 | $ 3 | $ (25) | 3,401 | (167) | 8,149 | ||
Beginning balance (in shares) at Jul. 02, 2021 | 312 | 4 | ||||||
Beginning balance at Jul. 02, 2021 | 10,721 | $ 3 | $ (232) | 3,608 | (197) | 7,539 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income (loss) | 1,199 | |||||||
Ending balance (in shares) at Apr. 01, 2022 | 313 | 0 | ||||||
Ending balance at Apr. 01, 2022 | 11,984 | $ 3 | $ 0 | 3,600 | (357) | 8,738 | ||
Beginning balance (in shares) at Oct. 01, 2021 | 312 | 1 | ||||||
Beginning balance at Oct. 01, 2021 | 11,361 | $ 3 | $ (25) | 3,401 | (167) | 8,149 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income (loss) | 564 | 564 | ||||||
Employee stock plans (in shares) | 1 | 1 | ||||||
Employee stock plans | 56 | $ 25 | 31 | |||||
Stock-based compensation | 87 | 87 | ||||||
Foreign currency translation adjustment | (45) | (45) | ||||||
Net unrealized gain (loss) on derivative contracts | (5) | (5) | ||||||
Ending balance (in shares) at Dec. 31, 2021 | 313 | 0 | ||||||
Ending balance at Dec. 31, 2021 | 12,018 | $ 3 | $ 0 | 3,519 | (217) | 8,713 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income (loss) | 25 | 25 | ||||||
Employee stock plans | (5) | (5) | ||||||
Stock-based compensation | 86 | 86 | ||||||
Actuarial pension gain | 1 | 1 | ||||||
Foreign currency translation adjustment | (82) | (82) | ||||||
Net unrealized gain (loss) on derivative contracts | (59) | (59) | ||||||
Ending balance (in shares) at Apr. 01, 2022 | 313 | 0 | ||||||
Ending balance at Apr. 01, 2022 | $ 11,984 | $ 3 | $ 0 | $ 3,600 | $ (357) | $ 8,738 |
Organization and Basis of Prese
Organization and Basis of Presentation | 9 Months Ended |
Apr. 01, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Basis of Presentation | Organization and Basis of Presentation Western Digital Corporation (“Western Digital” or the “Company”) is a leading developer, manufacturer, and provider of data storage devices and solutions that address the evolving needs of the information technology (“IT”) industry and the infrastructure that enables the proliferation of data in virtually every other industry. The Company creates environments for data to thrive. The Company is driving the innovation needed to help customers capture, preserve, access and transform an ever-increasing diversity of data. Everywhere data lives, from advanced data centers to mobile sensors to personal devices, the Company’s industry-leading solutions deliver the possibilities of data. The accounting policies followed by the Company are set forth in Part II, Item 8, Note 1, Organization and Basis of Presentation, of the Notes to Consolidated Financial Statements included in the Company’s Annual Report on Form 10‑K for the fiscal year ended July 2, 2021. In the opinion of management, all adjustments necessary to fairly state the Condensed Consolidated Financial Statements have been made. All such adjustments are of a normal, recurring nature. Certain information and footnote disclosures normally included in the Consolidated Financial Statements prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). These Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and the notes thereto included in the Company’s Annual Report on Form 10‑K for the fiscal year ended July 2, 2021. The results of operations for interim periods are not necessarily indicative of results to be expected for the full year. Fiscal Year The Company’s fiscal year ends on the Friday nearest to June 30 and typically consists of 52 weeks. Approximately every five to six years, the Company reports a 53-week fiscal year to align the fiscal year with the foregoing policy. Fiscal years 2022, which ends on July 1, 2022, and 2021, which ended on July 2, 2021, are each comprised of 52 weeks, with all quarters presented consisting of 13 weeks. Use of Estimates Company management has made estimates and assumptions relating to the reporting of certain assets and liabilities in conformity with U.S. GAAP. These estimates and assumptions have been applied using methodologies that are consistent throughout the periods presented with consideration given to the potential impacts of the ongoing COVID-19 pandemic. However, actual results could differ materially from these estimates and be significantly affected by the severity and duration of the COVID-19 pandemic, the extent of actions to contain or treat COVID-19, the timing, distribution, efficacy and public acceptance of vaccines around the world, additional surges of COVID-19, including the emergence of more contagious or vaccine-resistant variants, and how quickly and to what extent normal economic and operating activities can resume. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 9 Months Ended |
Apr. 01, 2022 | |
Accounting Changes and Error Corrections [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Accounting Pronouncements Recently Adopted In December 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes” (“ASU 2019-12”). ASU 2019-12 removes certain exceptions for recognizing deferred taxes for investments, performing intraperiod allocation and calculating income taxes in interim periods. The ASU also adds guidance to reduce complexity in certain areas, including recognizing deferred taxes for tax goodwill and allocating taxes to members of a consolidated group. The Company adopted this ASU on July 3, 2021, which is the beginning of fiscal 2022, and its adoption did not have a material impact on the Company’s Condensed Consolidated Financial Statements. Recently Issued Accounting Pronouncements Not Yet Adopted In August 2020, the FASB issued ASU No. 2020-06, “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity” (“ASU 2020-06”). ASU 2020-06 reduces the number of accounting models for convertible debt instruments and convertible preferred stock and results in fewer instruments with embedded conversion features being separately recognized from the host contract as compared with current standards. Those instruments that do not have a separately recognized embedded conversion feature will no longer recognize a debt issuance discount related to such a conversion feature and would recognize less interest expense on a periodic basis. Additionally, the ASU amends the calculation of the share dilution impact related to a conversion feature and eliminates the treasury method as an option. For instruments that do not have a component mandatorily settled in cash, the change will likely result in a higher amount of share dilution in the calculation of earnings per share. The Company expects to adopt this ASU in the first quarter of fiscal 2023, and is currently assessing the impact of adoption. In November 2021, the FASB issued ASU No. 2021-10, “Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance” (“ASU 2021-10”). ASU 2021-10 increases the transparency of government assistance received by requiring most business entities to disclose information about government assistance received, including (1) the types of assistance, (2) the entity’s accounting for the assistance, and (3) the effect of the assistance on an entity’s financial statements. This ASU is effective for fiscal years (and interim periods within those fiscal years) beginning after December 15, 2021, which for the Company is the first quarter of fiscal 2023. Early adoption is permitted. The Company is currently assessing the impact and timing of adoption of this ASU. |
Segment Information
Segment Information | 9 Months Ended |
Apr. 01, 2022 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information The Company manufactures, markets, and sells data storage devices and solutions in the U.S. and in foreign countries through its sales personnel, dealers, distributors, retailers, and subsidiaries. Historically, the Company had been managed and reported under a single operating segment. Late in the first quarter of fiscal 2021, the Chief Executive Officer, who is the Company’s Chief Operating Decision Maker (“CODM”), announced a decision to reorganize the Company’s business by forming two separate product business units: flash-based products (“Flash”) and hard disk drives (“HDD”). To align with the new operating model and business structure, the Company made management organizational changes and implemented new reporting modules and processes to provide discrete information to manage the business. Effective July 3, 2021, the Company’s management finalized its assessment of the Company’s operating segments and concluded that the Company now has two reportable segments: Flash and HDD. The CODM evaluates performance of the Company and makes decisions regarding allocation of resources based on each operating segment’s net revenue and gross margin, which are summarized below. Because of the integrated nature of the Company’s production and distribution activities, separate segment asset measures are not available or reviewed by the CODM to evaluate the performance of or to allocate resources to the segments. The following table summarizes the operating performance of the Company’s reportable segments: Three Months Ended Nine Months Ended April 1, April 2, April 1, April 2, Net revenue: Flash $ 2,243 $ 2,175 $ 7,353 $ 6,287 HDD 2,138 1,962 6,912 5,715 Total net revenue $ 4,381 $ 4,137 $ 14,265 $ 12,002 Gross profit: Flash $ 798 $ 653 $ 2,665 $ 1,752 HDD 592 491 2,061 1,462 Total gross profit for segments 1,390 1,144 4,726 3,214 Unallocated corporate items: Contamination related charges (203) — (203) — Stock-based compensation expense (13) (14) (36) (41) Amortization of acquired intangible assets — (39) (65) (293) Recoveries from a power outage incident 7 — 7 75 Total unallocated corporate items (209) (53) (297) (259) Consolidated gross profit $ 1,181 $ 1,091 $ 4,429 $ 2,955 Gross margin: Flash 35.6 % 30.0 % 36.2 % 27.9 % HDD 27.7 % 25.0 % 29.8 % 25.6 % Consolidated gross margin 27.0 % 26.4 % 31.0 % 24.6 % Disaggregated Revenue The Company’s broad portfolio of technology and products address multiple end markets. In the fiscal first quarter of 2022, the Company refined the end markets it reports to be Cloud, Client and Consumer. Cloud represents a large and growing end market comprised primarily of products for public or private cloud environments and end customers, which the Company believes it is uniquely positioned to address as the only provider of both flash and hard drive products. Through the Client end market, the Company provides its original equipment manufacturer (“OEM”) and channel customers a broad array of high-performance flash and hard drive solutions across personal computer, mobile, gaming, automotive, virtual reality headsets, at-home entertainment, and industrial spaces. The Consumer end market is highlighted by the Company’s broad range of retail and other end-user products, which capitalize on the strength of the Company’s product brand recognition and vast points of presence around the world. The Company’s disaggregated revenue information is as follows: Three Months Ended Nine Months Ended April 1, April 2, April 1, April 2, (in millions) Revenue by End Market Cloud $ 1,774 $ 1,423 $ 5,919 $ 3,728 Client 1,732 1,767 5,439 5,386 Consumer 875 947 2,907 2,888 Total Revenue $ 4,381 $ 4,137 $ 14,265 $ 12,002 Revenue by Geography Asia $ 2,400 $ 2,215 $ 7,685 $ 6,702 Americas 1,377 1,009 4,398 3,033 Europe, Middle East and Africa 604 913 2,182 2,267 Total Revenue $ 4,381 $ 4,137 $ 14,265 $ 12,002 The Company’s top 10 customers accounted for 44% and 43% of its net revenue for the three and nine months ended April 1, 2022, respectively, and 42% and 40% of its net revenue for the three and nine months ended April 2, 2021, respectively. For the three and nine months ended April 1, 2022 and April 2, 2021, no single customer accounted for 10% or more of the Company’s net revenue. Goodwill In connection with the Company’s determination of its reportable segments, effective July 3, 2021, the Company allocated its goodwill between its segments based on the estimated relative fair values of the business units. In addition, management performed a goodwill impairment assessment for each segment and concluded there were no impairment indicators as of both the beginning and end of the nine months ended April 1, 2022. The following table provides a summary of goodwill activity for the period: Flash HDD Total (in millions) Balance at July 3, 2021 $ 5,738 $ 4,328 $ 10,066 Foreign currency translation adjustment (3) (2) (5) Balance at April 1, 2022 $ 5,735 $ 4,326 $ 10,061 |
Revenues
Revenues | 9 Months Ended |
Apr. 01, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenues | Revenues Contract assets represent the Company’s rights to consideration where performance obligations are completed but the customer payments are not due until another performance obligation is satisfied. The Company did not have any contract assets as of either April 1, 2022 or July 2, 2021. The Company incurs sales commissions and other direct incremental costs to obtain sales contracts. The Company has applied the practical expedient to recognize the direct incremental costs of obtaining contracts as an expense when incurred if the amortization period is expected to be one year or less or the amount is not material, with these costs charged to Selling, general and administrative expenses. Other direct incremental costs to obtain contracts that have an expected benefit of greater than one year are amortized over the period of expected cash flows from the related contracts, and the amortization expense is recorded as a reduction to revenue. Total capitalized contract costs as of April 1, 2022 and July 2, 2021 as well as the related amortization for the three and nine months ended April 1, 2022 and April 2, 2021 were not material. Contract liabilities relate to customers’ payments in advance of performance under the contract and primarily relate to remaining performance obligations under support and maintenance contracts. As of April 1, 2022 and July 2, 2021, contract liabilities were not material. The Company applies the practical expedients and does not disclose transaction price allocated to the remaining performance obligations for (i) arrangements that have an original expected duration of one year or less, which mainly consist of the support and maintenance contracts, and (ii) variable consideration amounts for sale-based or usage-based royalties for intellectual property (“IP”) license arrangements, which typically range longer than one year. Remaining performance obligations are mainly attributed to right-to-access patent license arrangements and customer support and service contracts which will be recognized over the remaining contract period. The transaction price allocated to the remaining performance obligations as of April 1, 2022 was $42 million, which is mainly attributable to the functional IP license and service arrangements. The Company expects to recognize this amount as revenue as follows: $10 million during the remainder of fiscal 2022, $30 million in fiscal 2023, and $2 million in fiscal 2024 and thereafter. |
Supplemental Financial Statemen
Supplemental Financial Statement Data | 9 Months Ended |
Apr. 01, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Supplemental Financial Statement Data | Supplemental Financial Statement Data Accounts receivable, net From time to time, in connection with factoring agreements, the Company sells trade accounts receivable without recourse to third party purchasers in exchange for cash. During the nine months ended April 1, 2022 and April 2, 2021, the Company sold trade accounts receivable and received cash proceeds of $100 million and $233 million, respectively. The discounts on the trade accounts receivable sold were not material and were recorded within Other income, net in the Condensed Consolidated Statements of Operations. As of April 1, 2022 and July 2, 2021, the amount of factored receivables that remained outstanding was $100 million and $0, respectively. Inventories April 1, July 2, (in millions) Inventories: Raw materials and component parts $ 1,662 $ 1,623 Work-in-process 1,028 1,088 Finished goods 971 905 Total inventories $ 3,661 $ 3,616 Property, plant and equipment, net April 1, July 2, (in millions) Property, plant and equipment: Land $ 272 $ 278 Buildings and improvements 1,898 1,854 Machinery and equipment 8,438 7,860 Computer equipment and software 479 440 Furniture and fixtures 54 51 Construction-in-process 566 476 Property, plant and equipment, gross 11,707 10,959 Accumulated depreciation (8,219) (7,771) Property, plant and equipment, net $ 3,488 $ 3,188 Intangible assets April 1, July 2, (in millions) Finite-lived intangible assets $ 5,495 $ 5,508 In-process research and development 80 80 Accumulated amortization (5,323) (5,146) Intangible assets, net $ 252 $ 442 As part of prior acquisitions, the Company recorded at the time of the acquisition acquired in-process research and development (“IPR&D”) for projects in progress that had not yet reached technological feasibility. IPR&D is initially accounted for as an indefinite-lived intangible asset. Once a project reaches technological feasibility, the Company reclassifies the balance to existing technology and begins to amortize the intangible asset over its estimated useful life. Product warranty liability Changes in the warranty accrual were as follows: Three Months Ended Nine Months Ended April 1, April 2, April 1, April 2, (in millions) Warranty accrual, beginning of period $ 351 $ 366 $ 363 $ 408 Charges to operations 35 27 111 86 Utilization (20) (27) (71) (82) Changes in estimate related to pre-existing warranties (11) (9) (48) (55) Warranty accrual, end of period $ 355 $ 357 $ 355 $ 357 The current portion of the warranty accrual is classified in Accrued expenses and the long-term portion is classified in Other liabilities as noted below: April 1, July 2, (in millions) Warranty accrual: Current portion (included in Accrued expenses) $ 167 $ 175 Long-term portion (included in Other liabilities) 188 188 Total warranty accrual $ 355 $ 363 Other liabilities April 1, July 2, (in millions) Other liabilities: Non-current net tax payable $ 547 $ 684 Payables related to unrecognized tax benefits 996 750 Other non-current liabilities 688 633 Total other liabilities $ 2,231 $ 2,067 Accumulated other comprehensive income (loss) Accumulated other comprehensive income (loss) (“AOCI”), net of tax refers to expenses, gains and losses that are recorded as an element of shareholders’ equity but are excluded from net income. The following table illustrates the changes in the balances of each component of AOCI: Actuarial Pension Gains (Losses) Foreign Currency Translation Adjustment Unrealized Gains (Losses) on Derivative Contracts Total Accumulated Comprehensive Income (Loss) (in millions) Balance at July 2, 2021 $ (35) $ (38) $ (124) $ (197) Other comprehensive income (loss) before reclassifications 2 (123) (172) (293) Amounts reclassified from accumulated other comprehensive income (loss) — — 121 121 Income tax benefit related to items of other comprehensive income (loss) — — 12 12 Net current-period other comprehensive income (loss) 2 (123) (39) (160) Balance at April 1, 2022 $ (33) $ (161) $ (163) $ (357) During the three and nine months ended April 1, 2022, the amounts reclassified out of AOCI were losses related to foreign exchange contracts and interest rate swap contracts. Losses reclassified out of AOCI related to foreign exchange contracts were $14 million and $83 million, for the three and nine months ended April 1, 2022, respectively, and were substantially charged to Cost of revenue in the Condensed Consolidated Statements of Operations. Losses reclassified out of AOCI related to interest rate swap contracts were $13 million and $38 million, for the three and nine months ended April 1, 2022, respectively, and were charged to Interest expense in the Condensed Consolidated Statements of Operations. |
Fair Value Measurements and Inv
Fair Value Measurements and Investments | 9 Months Ended |
Apr. 01, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements and Investments | Fair Value Measurements and Investments Financial Instruments Carried at Fair Value Financial assets and liabilities that are remeasured and reported at fair value at each reporting period are classified and disclosed in one of the following three levels: Level 1. Quoted prices in active markets for identical assets or liabilities. Level 2. Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3. Inputs that are unobservable for the asset or liability and that are significant to the fair value of the assets or liabilities. The following tables present information about the Company’s financial assets and liabilities that are measured at fair value on a recurring basis as of April 1, 2022 and July 2, 2021, and indicate the fair value hierarchy of the valuation techniques utilized to determine such values: April 1, 2022 Level 1 Level 2 Level 3 Total (in millions) Assets: Cash equivalents - Money market funds $ 53 $ — $ — $ 53 Foreign exchange contracts — 31 — 31 Total assets at fair value $ 53 $ 31 $ — $ 84 Liabilities: Foreign exchange contracts $ — $ 188 $ — $ 188 Interest rate swap contracts — 16 — 16 Total liabilities at fair value $ — $ 204 $ — $ 204 July 2, 2021 Level 1 Level 2 Level 3 Total (in millions) Assets: Cash equivalents - Money market funds $ 1,283 $ — $ — $ 1,283 Foreign exchange contracts — 14 — 14 Total assets at fair value $ 1,283 $ 14 $ — $ 1,297 Liabilities: Foreign exchange contracts $ — $ 65 $ — $ 65 Interest rate swap contracts — 80 — 80 Total liabilities at fair value $ — $ 145 $ — $ 145 During the periods presented, the Company had no transfers of financial assets and liabilities between levels and there were no changes in valuation techniques or the inputs used in the fair value measurement. Financial Instruments Not Carried at Fair Value For financial instruments where the carrying value (which includes principal adjusted for any unamortized issuance costs, and discounts or premiums) differs from fair value (which is based on quoted market prices), the following table represents the related carrying value and fair value for each of the Company’s outstanding financial instruments. Each of the financial instruments presented below was categorized as Level 2 for all periods presented, based on the frequency of trading immediately prior to the end of the third quarter of fiscal 2022 and the fourth quarter of fiscal 2021, respectively. April 1, 2022 July 2, 2021 Carrying Fair Carrying Fair (in millions) Variable interest rate Term Loan A-1 maturing 2023 $ — $ — $ 4,327 $ 4,346 Variable interest rate Term Loan B-4 maturing 2023 — — 1,093 1,094 1.50% convertible notes due 2024 1,040 1,063 1,017 1,173 4.75% senior unsecured notes due 2026 2,290 2,342 2,288 2,556 Variable interest rate Term Loan A-2 maturing 2027 2,843 2,802 — — 2.85% senior unsecured notes due 2029 495 457 — — 3.10% senior unsecured notes due 2032 494 445 — — Total $ 7,162 $ 7,109 $ 8,725 $ 9,169 |
Derivatives Instruments and Hed
Derivatives Instruments and Hedging Activities | 9 Months Ended |
Apr. 01, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments and Hedging Activities | Derivative Instruments and Hedging Activities As of April 1, 2022, the Company had outstanding foreign exchange forward contracts that were designated as either cash flow hedges or non-designated hedges. Substantially all of the contract maturity dates of these foreign exchange forward contracts do not exceed 12 months. In addition, the Company had outstanding pay-fixed interest rate swaps that were designated as cash flow hedges of variable rate interest payments through February 2023, on a portion of its term loans. Changes in fair values of the non-designated foreign exchange contracts are recognized in Other income, net and are largely offset by corresponding changes in the fair values of the foreign currency denominated monetary assets and liabilities. For each of the three and nine months ended April 1, 2022 and April 2, 2021, total net realized and unrealized transaction and foreign exchange contract currency gains and losses were not material to the Company’s Condensed Consolidated Financial Statements. Unrealized gains or losses on designated cash flow hedges are recognized in AOCI. For more information regarding cash flow hedges, see Part I, Item 1, Note 5. Supplemental Information - Accumulated other comprehensive income (loss) , of the Notes to the Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q. Netting Arrangements Under certain provisions and conditions within agreements with counterparties to the Company’s foreign exchange forward contracts, subject to applicable requirements, the Company has the right of offset associated with the Company’s foreign exchange forward contracts and is allowed to net settle transactions of the same currency with a single net amount payable by one party to the other. As of April 1, 2022 and July 2, 2021, the effect of rights of offset was not material and the Company did not offset or net the fair value amounts of derivative instruments in its Condensed Consolidated Balance Sheets. |
Debt
Debt | 9 Months Ended |
Apr. 01, 2022 | |
Debt Disclosure [Abstract] | |
Debt | Debt Debt consisted of the following as of April 1, 2022 and July 2, 2021: April 1, July 2, (in millions) Variable interest rate Term Loan A-1 maturing 2023 $ — $ 4,332 Variable interest rate Term Loan B-4 maturing 2023 — 1,093 1.50% convertible notes due 2024 1,100 1,100 4.75% senior unsecured notes due 2026 2,300 2,300 Variable interest rate Term Loan A-2 maturing 2027 2,850 — 2.85% senior unsecured notes due 2029 500 — 3.10% senior unsecured notes due 2032 500 — Total debt 7,250 8,825 Issuance costs and debt discounts (88) (100) Subtotal 7,162 8,725 Less current portion of long-term debt (75) (251) Long-term debt $ 7,087 $ 8,474 In October 2021, the Company voluntarily prepaid the remaining principal balance of its Term Loan B-4 in accordance with its terms. In December 2021, the Company issued $500 million aggregate principal amount of 2.850% senior unsecured notes due February 1, 2029 (the “ 2029 Notes ”) and issued $500 million aggregate principal amount of 3.100% senior unsecured notes due February 1, 2032 (the “ 2032 Notes ”) pursuant to the terms of an indenture, dated as of December 10, 2021 (the “Base Indenture”) between the Company and U.S. Bank National Association, as trustee (the “Trustee”), as supplemented by the first supplemental indenture dated as of December 10, 2021 (the “First Supplemental Indenture”) between the Company and the Trustee. As used herein, “Indenture” means the Base Indenture, as supplemented by the First Supplemental Indenture. The Indenture contains certain restrictive covenants which are subject to a number of limitations and exceptions. Interest for both the 2029 Notes and 2032 Notes is payable on February 1 and August 1 of each year. The Company is not required to make principal payments on either the 2029 Notes or 2032 Notes prior to their maturity dates. During the six months ended December 31, 2021, the Company made scheduled principal payments of $126 million and voluntary prepayments of $1.21 billion on the outstanding principal balance on its Term Loan A-1 in accordance with its terms to reduce the remaining outstanding principal balance to $3.00 billion. Payments were made using proceeds from the issuance of the 2029 Notes and the 2032 Notes and available cash on hand. On January 7, 2022, the Company entered into a restatement agreement (“Restatement Agreement”) to amend and restate the Loan Agreement, originally dated as of April 29, 2016 (including subsequent amendments and the Restatement Agreement, collectively, the “Loan Agreement”), to provide for, among other things, (i) the issuance of a new $3.00 billion Term Loan A-2 maturing in January 2027 (the “Term Loan A-2”) to replace its previously existing Term Loan A-1; and (ii) the availability of a new $2.25 billion revolving credit facility maturing in January 2027 (the “2027 Revolving Facility”) to replace its previously existing $2.25 billion revolving credit facility and (iii) additional covenant flexibility and other modifications. The obligations under the Loan Agreement are the senior unsecured obligations of the Company and do not benefit from any collateral or subsidiary guarantees. The Term Loan A-2 Loan bears interest, at the Company’s option, at a per annum rate equal to either (x) the Adjusted Term Secured Overnight Financing Rate (“SOFR”) (as defined in the Loan Agreement) plus an applicable margin varying from 1.125% to 2.000% or (y) a base rate plus an applicable margin varying from 0.125% to 1.000%, in each case depending on the corporate family ratings of the Company from at least two of Standard & Poor’s Ratings Services (“S&P”), Moody’s Investors Service, Inc. (“Moody’s”) and Fitch Ratings, Inc. (“Fitch”), with an initial interest rate of Adjusted Term SOFR plus 1.375%. The Term Loan A-2 amortizes in quarterly installments of $19 million for each of the first four quarters beginning the quarter ending July 1, 2022 through the quarter ending March 31, 2023; $38 million per quarter thereafter; and the remaining balance payable January 7, 2027. Loans under the 2027 Revolving Facility bear interest at a per annum rate, at the Company’s option, equal to either (x) the Adjusted Term SOFR Rate (as defined in the Loan Agreement) plus an applicable margin varying from 1.125% to 2.000% or (y) a base rate plus an applicable margin varying from 0.125% to 1.000%, in each case depending on the corporate family ratings of the Company from at least two of S&P, Moody’s and Fitch, with an initial rate of Adjusted Term SOFR plus 1.375%. The Company is also required to pay an unused commitment fee on the 2027 Revolving Facility ranging from 0.120% to 0.350% based on the corporate family ratings of the Company from at least two of S&P, Moody’s and Fitch, with an initial unused commitment fee of 0.200%. Issuance costs and discounts are amortized to interest expense over their respective terms, and as of April 1, 2022, unamortized issuance costs and discounts were $5 million for the 2029 Notes, $6 million for the 2032 Notes, and $7 million for the Term Loan A-2. |
Pensions and Other Post-Retirem
Pensions and Other Post-Retirement Benefit Plans | 9 Months Ended |
Apr. 01, 2022 | |
Retirement Benefits [Abstract] | |
Pensions and Other Post-Retirement Benefit Plans | Pension and Other Post-Retirement Benefit Plans The Company has pension and other post-retirement benefit plans in various countries. The Company’s principal pension plans are in Japan, Thailand and the Philippines. All pension and other post-retirement benefit plans outside of the Company’s Japan, Thailand and Philippines defined benefit pension plans (the “Pension Plans”) are immaterial to the Condensed Consolidated Financial Statements. The expected long-term rate of return on the Pension Plans assets is 2.5%. Obligations and Funded Status The following table presents the unfunded status of the benefit obligations for the Pension Plans: April 1, July 2, (in millions) Benefit obligation at end of period $ 339 $ 359 Fair value of plan assets at end of period 210 227 Unfunded status $ 129 $ 132 The following table presents the unfunded amounts related to the Pension Plans as recognized on the Company’s Condensed Consolidated Balance Sheets: April 1, July 2, (in millions) Current liabilities $ 1 $ 1 Non-current liabilities 128 131 Net amount recognized $ 129 $ 132 |
Related Parties and Related Com
Related Parties and Related Commitments and Contingencies | 9 Months Ended |
Apr. 01, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Related Parties and Related Commitments and Contingencies | Related Parties and Related Commitments and Contingencies Flash Ventures The Company’s business ventures with Kioxia Corporation (“Kioxia”) consist of three separate legal entities: Flash Partners Ltd. (“Flash Partners”), Flash Alliance Ltd. (“Flash Alliance”), and Flash Forward Ltd. (“Flash Forward”), collectively referred to as “Flash Ventures”. The following table presents the notes receivable from, and equity investments in, Flash Ventures as of April 1, 2022 and July 2, 2021: April 1, July 2, (in millions) Notes receivable, Flash Partners $ 51 $ 191 Notes receivable, Flash Alliance 130 213 Notes receivable, Flash Forward 666 561 Investment in Flash Partners 182 199 Investment in Flash Alliance 266 293 Investment in Flash Forward 122 129 Total notes receivable and investments in Flash Ventures $ 1,417 $ 1,586 During the three and nine months ended April 1, 2022 and during the three and nine months ended April 2, 2021, the Company made net payments to Flash Ventures of $1.1 billion and $3.4 billion, and $1.1 billion and $3.3 billion, respectively, for purchased flash-based memory wafers and net loans. The Company makes, or will make, loans to Flash Ventures to fund equipment investments for new process technologies and additional wafer capacity. The Company aggregates its Flash Ventures’ notes receivable into one class of financing receivables due to the similar ownership interest and common structure in each Flash Venture entity. For all reporting periods presented, no loans were past due and no loan impairments were recorded. The Company’s notes receivable from each Flash Ventures entity, denominated in Japanese yen, are secured by equipment owned by that Flash Ventures entity. As of April 1, 2022 and July 2, 2021, the Company had Accounts payable balances due to Flash Ventures of $396 million and $398 million, respectively. The Company’s maximum reasonably estimable loss exposure (excluding lost profits) as a result of its involvement with Flash Ventures, based upon the Japanese yen to U.S. dollar exchange rate at April 1, 2022, is presented below. Investments in Flash Ventures are denominated in Japanese yen, and the maximum estimable loss exposure excludes any cumulative translation adjustment due to revaluation from the Japanese yen to the U.S. dollar. April 1, (in millions) Notes receivable $ 847 Equity investments 570 Operating lease guarantees 1,897 Inventory and prepayments 983 Maximum estimable loss exposure $ 4,297 The Company is obligated to pay for variable costs incurred in producing its share of Flash Ventures’ flash-based memory wafer supply, based on its three-month forecast, which generally equals 50% of Flash Ventures’ output. In addition, the Company is obligated to pay for half of Flash Ventures’ fixed costs regardless of the output the Company chooses to purchase. The Company is not able to estimate its total wafer purchase commitment obligation beyond its rolling three-month purchase commitment because the price is determined by reference to the future cost of producing the semiconductor wafers. In addition, the Company is committed to fund 49.9% to 50.0% of each Flash Ventures entity’s capital investments to the extent that each Flash Ventures entity’s operating cash flow is insufficient to fund these investments. In January 2022, the Company entered into additional agreements regarding Flash Ventures’ investment in a new wafer fabrication facility currently under construction in Yokkaichi, Japan, referred to as “Y7”. The primary purpose of Y7 is to provide clean room space to continue the transition of existing flash-based wafer capacity to newer flash technology nodes. The Company is committed to pay, among other items, future building depreciation prepayments of $482 million as follows: $142 million in fiscal year 2022, $314 million in fiscal year 2023 and $26 million in fiscal year 2024, to be credited against future wafer charges. In June 2019, an unexpected power outage incident occurred at the flash-based memory manufacturing facilities operated in Yokkaichi, Japan. The power outage incident impacted the facilities and process tools and resulted in damage to flash wafers in production and a reduction in the Company’s flash wafer availability. During the three and nine months ended April 1, 2022, the Company recovered $7 million related to this incident from insurance carriers. During the three and nine months ended April 2, 2021, the Company recovered $45 million and $75 million, respectively, related to this incident from insurance carriers. Recoveries related to the incident were recorded in Cost of revenue. In February 2022, contamination of certain material used in manufacturing processes occurred at both the Yokkaichi and Kitakami, Japan fabrication facilities, resulting in damage to inventory units in production, a temporary disruption to production operations and a reduction in the Company’s flash wafer availability. During the three and nine months ended April 1, 2022, the Company incurred charges of $203 million related to this contamination incident that were recorded in Cost of revenue, which primarily consisted of scrapped inventory and rework costs, decontamination and other costs needed to restore the facilities to normal capacity, and under absorption of overhead costs. The Company is evaluating potential options for recovery. Inventory Purchase Commitments with Flash Ventures. Purchase orders placed under Flash Ventures for up to three months are binding and cannot be canceled. Research and Development Activities. The Company participates in common research and development (“R&D”) activities with Kioxia and is contractually committed to a minimum funding level. R&D commitments are immaterial to the Condensed Consolidated Financial Statements. Off-Balance Sheet Liabilities Flash Ventures sells to and leases back from a consortium of financial institutions a portion of its tools and has entered into equipment lease agreements of which the Company guarantees half or all of the outstanding obligations under each lease agreement. The lease agreements are subject to customary covenants and cancellation events related to Flash Ventures and each of the guarantors. The occurrence of a cancellation event could result in an acceleration of Flash Ventures’ obligations and a call on the Company’s guarantees. The following table presents the Company’s portion of the remaining guarantee obligations under the Flash Ventures’ lease facilities in both Japanese yen and U.S. dollar-equivalent, based upon the Japanese yen to U.S. dollar exchange rate as of April 1, 2022. Lease Amounts (Japanese yen, in billions) (U.S. dollar, in millions) Total guarantee obligations ¥ 223 $ 1,897 The following table details the breakdown of the Company’s remaining guarantee obligations between the principal amortization and the purchase option exercise price at the end of the term of the Flash Ventures lease agreements, in annual installments as of April 1, 2022 in U.S. dollars, based upon the Japanese yen to U.S. dollar exchange rate as of April 1, 2022: Annual Installments Payment of Principal Amortization Purchase Option Exercise Price at Final Lease Terms Guarantee Amount (in millions) Remaining three months of 2022 $ 150 $ — $ 150 2023 516 59 575 2024 369 106 475 2025 181 97 278 2026 153 146 299 Thereafter 27 93 120 Total guarantee obligations $ 1,396 $ 501 $ 1,897 The Company and Kioxia have agreed to mutually contribute to, and indemnify each other and Flash Ventures for, environmental remediation costs or liability resulting from Flash Ventures’ manufacturing operations in certain circumstances. The Company has not made any indemnification payments, nor recorded any indemnification receivables, under any such agreements. As of April 1, 2022, no amounts have been accrued in the Condensed Consolidated Financial Statements with respect to these indemnification agreements. Unis Venture The Company has a joint venture with Unisplendour Corporation Limited and Unissoft (Wuxi) Group Co. Ltd. (“Unis”), referred to as the “Unis Venture”, to market and sell the Company’s products in China and to develop data storage systems for the Chinese market in the future. The Unis Venture is 49% owned by the Company and 51% owned by Unis. The Company accounts for its investment in the Unis Venture under the equity method of accounting. Revenue on products distributed by the Unis Venture is recognized upon sell through to third-party customers. For both the three and nine months ended April 1, 2022, the Company recognized approximately 5% of its consolidated revenue on products distributed by the Unis Venture. For both the three and nine months ended April 2, 2021, the Company recognized approximately 3% of its consolidated revenue on products distributed by the Unis Venture. The outstanding accounts receivable due from the Unis Venture were 6% and 5% of Accounts receivable, net for April 1, 2022 and July 2, 2021, respectively. |
Leases and Other Commitments
Leases and Other Commitments | 9 Months Ended |
Apr. 01, 2022 | |
Leases [Abstract] | |
Leases and Other Commitments | Leases and Other Commitments Leases The Company leases certain domestic and international facilities and data center space under long-term, non-cancelable operating leases that expire at various dates through 2034. These leases include no material variable or contingent lease payments. Operating lease assets and liabilities are recognized based on the present value of the remaining lease payments discounted using the Company’s incremental borrowing rate. Operating lease assets also include prepaid lease payments minus any lease incentives. Extension or termination options present in the Company’s lease agreements are included in determining the right-of-use asset and lease liability when it is reasonably certain the Company will exercise those options. Lease expense is recognized on a straight-line basis over the lease term. The following table summarizes supplemental balance sheet information related to operating leases as of April 1, 2022: Lease Amounts Minimum lease payments by fiscal year: ($ in millions) Remaining three months of 2022 $ 14 2023 48 2024 48 2025 44 2026 44 Thereafter 188 Total future minimum lease payments 386 Less: Imputed Interest 55 Present value of lease liabilities 331 Less: Current portion (included in Accrued expenses) 41 Long-term operating lease liabilities (included in Other liabilities) $ 290 Operating lease right-of-use assets (included in Other non-current assets) $ 313 Weighted average remaining lease term in years 8.4 Weighted average discount rate 3.4 % The following table summarizes supplemental disclosures of operating cost and cash flow information related to operating leases: Three Months Ended Nine Months Ended April 1, April 2, April 1, April 2, (in millions) Cost of operating leases $ 15 $ 12 $ 42 $ 37 Cash paid for operating leases 13 12 37 38 Operating lease assets obtained in exchange for operating lease liabilities 9 1 132 28 Purchase Agreements and Other Commitments In the normal course of business, the Company enters into purchase orders with suppliers for the purchase of components used to manufacture its products. These purchase orders generally cover forecasted component supplies needed for production during the next quarter, are recorded as a liability upon receipt of the components, and generally may be changed or canceled at any time prior to shipment of the components. The Company also enters into long-term agreements with suppliers that contain fixed future commitments, which are contingent on certain conditions such as performance, quality and technology of the vendor’s components. As of April 1, 2022, the Company had the following minimum long-term commitments: Long-term commitments (in millions) Fiscal year: Remaining three months of 2022 $ 162 2023 560 2024 309 2025 148 2026 20 Thereafter 170 Total $ 1,369 |
Shareholders' Equity
Shareholders' Equity | 9 Months Ended |
Apr. 01, 2022 | |
Share-based Payment Arrangement [Abstract] | |
Shareholders' Equity | Shareholders’ Equity Stock-based Compensation Expense The following tables present the Company’s stock-based compensation for equity-settled awards by type (i.e., restricted stock units (“RSUs”), restricted stock unit awards with performance conditions or market conditions (“PSUs”), and rights to purchase shares of common stock under the Company’s Employee Stock Purchase Plan (“ESPP”)) and financial statement line as well as the related tax benefit included in the Company’s Condensed Consolidated Statements of Operations: Three Months Ended Nine Months Ended April 1, April 2, April 1, April 2, (in millions) RSUs and PSUs $ 75 $ 73 $ 220 $ 212 ESPP 11 10 29 27 Total $ 86 $ 83 $ 249 $ 239 Three Months Ended Nine Months Ended April 1, April 2, April 1, April 2, (in millions) Cost of revenue $ 13 $ 14 $ 36 $ 41 Research and development 43 41 126 120 Selling, general and administrative 30 28 87 78 Subtotal 86 83 249 239 Tax benefit (9) (11) (37) (35) Total $ 77 $ 72 $ 212 $ 204 Windfall tax benefits and tax deficiencies for shortfalls related to the vesting and exercise of stock-based awards, which are recognized as a component of the Company’s Income tax expense, were not material for the periods presented. Compensation cost related to unvested RSUs, PSUs, and rights to purchase shares of common stock under the ESPP will generally be amortized on a straight-line basis over the remaining average service period. The following table presents the unamortized compensation cost and weighted average service period of all unvested outstanding awards as of April 1, 2022: Unamortized Compensation Costs Weighted Average Service Period (in millions) (years) RSUs and PSUs (1) $ 589 2.3 ESPP 70 1.5 Total unamortized compensation cost $ 659 (1) Weighted average service period assumes the performance metrics are met for the PSUs. Plan Activities Stock Options The following table summarizes stock option activity under the Company’s incentive plans. All outstanding options were exercisable at April 1, 2022: Number of Shares Weighted Average Exercise Price Per Share Weighted Average Remaining Contractual Life Aggregate Intrinsic Value (in millions) (in years) (in millions) Options outstanding at July 2, 2021 1.5 $ 72.84 1.2 $ 15 Exercised (0.2) 43.52 3 Canceled or expired (0.4) 98.24 Options outstanding at April 1, 2022 0.9 65.97 0.77 2 RSUs and PSUs The following table summarizes RSU and PSU activity under the Company’s incentive plans: Number of Shares Weighted Average Grant Date Fair Value Aggregate Intrinsic Value at Vest Date (in millions) (in millions) RSUs and PSUs outstanding at July 2, 2021 16.1 $ 50.12 Granted 5.5 62.53 Vested (4.9) 53.93 $ 301 Forfeited (1.7) 51.77 RSUs and PSUs outstanding at April 1, 2022 15.0 53.33 RSUs and PSUs are generally settled in an equal number of shares of the Company’s common stock at the time of vesting of the units. Stock Repurchase Program |
Income Tax Expense
Income Tax Expense | 9 Months Ended |
Apr. 01, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Tax Expense | Income Tax Expense The Tax Cuts and Jobs Act (the “2017 Act”), enacted on December 22, 2017, includes a broad range of tax reform proposals affecting businesses. The Company completed its accounting for the tax effects of the enactment of the 2017 Act during the second quarter of fiscal 2019. However, the U.S. Treasury and the Internal Revenue Service (“IRS”) have issued tax guidance on certain provisions of the 2017 Act since the enactment date, and the Company anticipates the issuance of additional regulatory and interpretive guidance. The Company applied a reasonable interpretation of the 2017 Act along with the then-available guidance in finalizing its accounting for the tax effects of the 2017 Act. Any additional regulatory or interpretive guidance would constitute new information, which may require further refinements to the Company’s estimates in future periods. The following table presents the Company’s Income tax expense and the effective tax rate: Three Months Ended Nine Months Ended April 1, April 2, April 1, April 2, ($ in millions) Income before taxes $ 262 $ 249 $ 1,612 $ 331 Income tax expense 237 52 413 132 Effective tax rate 90 % 21 % 26 % 40 % The primary drivers of the difference between the effective tax rate for the three and nine months ended April 1, 2022 and the U.S. Federal statutory rate of 21%, are the relative mix of earnings and losses by jurisdiction, the deduction for foreign derived intangible income, credits, and tax holidays in Malaysia, the Philippines and Thailand that will expire at various dates during fiscal years 2024 through 2031. In addition, the effective tax rate for the three and nine months ended April 1, 2022 includes the discrete effect of a net increase to the liability for unrecognized tax benefits, which includes interest and offsetting tax benefits, as a result of ongoing discussions with various taxing authorities of $194 million and $219 million, respectively. The primary drivers of the difference between the effective tax rate for the three and nine months ended April 2, 2021 and the U.S. Federal statutory rate of 21% are the relative mix of earnings and losses by jurisdiction, the deduction for foreign derived intangible income, credits, and tax holidays in Malaysia, Philippines and Thailand. In addition, the effective tax rate for the three and nine months ended April 2, 2021 includes discrete effects for increases to unrecognized tax benefits of $35 million as a result of ongoing discussions with various taxing authorities that are offset in part by a release of certain unrecognized tax benefits of $22 million as a result of business realignment activities. The effective tax rate for the nine months ended April 2, 2021 also includes the discrete effects of net tax deficiencies from shortfalls of $11 million related to the vesting of stock-based awards and additional tax expense of $10 million from the re-measurement of deferred tax liabilities due to restructuring activities, which have no impact on the amount of income taxes paid by the Company. As previously disclosed, the IRS issued statutory notices of deficiency and notices of proposed adjustments with respect to transfer pricing with the Company’s foreign subsidiaries and intercompany payable balances for fiscal years 2008 through 2015. The Company filed petitions with the U.S. Tax Court covering fiscal years 2008 through 2012, for which it had received statutory notices of deficiency, while fiscal years 2013 through 2015 remain in the jurisdiction of the IRS’s Examination function. The IRS has filed various Amendments to Answer with the U.S. Tax Court which, together with the notices of proposed adjustments, would result in additional federal income tax liabilities totaling approximately $1.6 billion and penalties totaling $449 million with respect to fiscal years 2008 through 2015. During the three months ended April 1, 2022, in preparation for trial in May 2022, new information became available which required the Company to re-measure its unrecognized tax benefits for which an additional tax expense of $224 million, including interest, was recorded. Uncertain Tax Positions With the exception of certain unrecognized tax benefits that are directly associated with the tax position taken, unrecognized tax benefits are presented gross in the Condensed Consolidated Balance Sheets. The following is a tabular reconciliation of the total amounts of unrecognized tax benefits excluding accrued interest and penalties for the nine months ended April 1, 2022 (in millions): Accrual balance at July 2, 2021 $ 748 Gross increases related to current year tax positions 7 Gross increases related to prior year tax positions 216 Gross decreases related to prior year tax positions (57) Settlements (2) Lapse of statute of limitations (5) Accrual balance at April 1, 2022 $ 907 As of April 1, 2022, the liability for unrecognized tax benefits (excluding accrued interest and penalties) was $907 million. Interest and penalties related to unrecognized tax benefits are recognized in liabilities recorded for uncertain tax positions and are recorded in the provision for income taxes. Accrued interest and penalties included in the Company’s liability related to unrecognized tax benefits as of April 1, 2022 was $231 million. Of these amounts, approximately $996 million could result in potential cash payments. Subsequent to April 1, 2022, the Company and the IRS tentatively reached a basis for resolving the statutory notices of deficiency and notices of proposed adjustments with respect to fiscal years 2008 through 2015 subject to the parties entering into final stipulations and a closing agreement. As a result, the trial originally scheduled to take place in May 2022 has been cancelled. The tentative basis for resolution would incrementally increase the liability for unrecognized tax benefits, including interest and offsetting tax benefits, by approximately $80 million to $100 million. Including this incremental increase, the Company expects to pay tax and interest totaling approximately $600 million to $700 million within the next twelve months, which the Company expects to be partially offset by reductions to its mandatory deemed repatriation tax obligations aggregating to approximately $100 million in later years. The Company is not able to provide a reasonable estimate of the timing of future tax and interest payments related to the remaining unrecognized tax benefits. The Company believes that adequate provision has been made for any adjustments that may result from any other tax examinations. However, the outcome of such tax examinations cannot be predicted with certainty. If any issues addressed in the Company’s tax examinations are resolved in a manner not consistent with management’s expectations, the Company could be required to adjust its provision for income taxes in the period such resolution occurs. Any significant change in the amount of the Company’s liability for unrecognized tax benefits would most likely result from additional information or settlements relating to the examination of the Company’s tax returns. |
Net Income Per Common Share
Net Income Per Common Share | 9 Months Ended |
Apr. 01, 2022 | |
Earnings Per Share [Abstract] | |
Net Income Per Common Share | Net Income Per Common Share The following table presents the computation of basic and diluted income per common share: Three Months Ended Nine Months Ended April 1, April 2, April 1, April 2, (in millions, except per share data) Net income $ 25 $ 197 $ 1,199 $ 199 Weighted average shares outstanding: Basic 313 306 312 305 Employee stock options, RSUs, PSUs and ESPP 3 7 4 3 Basic and diluted 316 313 316 308 Income per common share: Basic $ 0.08 $ 0.64 $ 3.84 $ 0.65 Diluted $ 0.08 $ 0.63 $ 3.79 $ 0.65 Anti-dilutive potential common shares excluded 5 1 4 7 |
Employee Termination, Asset Imp
Employee Termination, Asset Impairment and Other Charges | 9 Months Ended |
Apr. 01, 2022 | |
Postemployment Benefits [Abstract] | |
Employee Termination, Asset Impairment and Other Charges | Employee Termination, Asset Impairment, and Other Charges Business Realignment The Company periodically incurs charges as part of the integration process of recent acquisitions and to realign its operations with anticipated market demand, primarily consisting of organization rationalization designed to streamline its business, reduce its cost structure and focus its resources. The Company recorded the following charges related to these actions: Three Months Ended Nine Months Ended April 1, April 2, April 1, April 2, (in millions) Employee termination benefits $ 4 $ 2 $ 22 $ 27 Asset impairments and losses (gains) on disposal of assets — (70) 2 (70) Total employee termination, asset impairment, and other charges $ 4 $ (68) $ 24 $ (43) The following table presents an analysis of the components of these activities against the reserve during the nine months ended April 1, 2022: Employee Termination Benefits (in millions) Accrual balance at July 2, 2021 $ 2 Charges 22 Cash payments (20) Accrual balance at April 1, 2022 $ 4 |
Legal Proceedings
Legal Proceedings | 9 Months Ended |
Apr. 01, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Legal Proceedings | Legal Proceedings Tax For disclosures regarding statutory notices of deficiency issued by the IRS in June 2018 and December 2018, petitions filed by the Company with the U.S. Tax Court in September 2018 and March 2019, additional penalties asserted by the IRS in March 2021 and further Amendments to Answers filed by the IRS in June 2021 and January 2022, and a tentative resolution with respect to certain matters, see Note 13, Income Tax Expense. Other Matters In the normal course of business, the Company is subject to legal proceedings, lawsuits and other claims. Although the ultimate aggregate amount of probable monetary liability or financial impact with respect to these other matters is subject to many uncertainties, management believes that any monetary liability or financial impact to the Company from these matters, individually and in the aggregate, would not be material to the Company’s financial condition, results of operations or cash flows. However, any monetary liability and financial impact to the Company from these matters could differ materially from the Company’s expectations. |
Organization and Basis of Pre_2
Organization and Basis of Presentation (Policies) | 9 Months Ended |
Apr. 01, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Western Digital Corporation (“Western Digital” or the “Company”) is a leading developer, manufacturer, and provider of data storage devices and solutions that address the evolving needs of the information technology (“IT”) industry and the infrastructure that enables the proliferation of data in virtually every other industry. The Company creates environments for data to thrive. The Company is driving the innovation needed to help customers capture, preserve, access and transform an ever-increasing diversity of data. Everywhere data lives, from advanced data centers to mobile sensors to personal devices, the Company’s industry-leading solutions deliver the possibilities of data. The accounting policies followed by the Company are set forth in Part II, Item 8, Note 1, Organization and Basis of Presentation, of the Notes to Consolidated Financial Statements included in the Company’s Annual Report on Form 10‑K for the fiscal year ended July 2, 2021. In the opinion of management, all adjustments necessary to fairly state the Condensed Consolidated Financial Statements have been made. All such adjustments are of a normal, recurring nature. Certain information and footnote disclosures normally included in the Consolidated Financial Statements prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). These Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and the notes thereto included in the Company’s Annual Report on Form 10‑K for the fiscal year ended July 2, 2021. The results of operations for interim periods are not necessarily indicative of results to be expected for the full year. |
Fiscal Year | Fiscal YearThe Company’s fiscal year ends on the Friday nearest to June 30 and typically consists of 52 weeks. Approximately every five to six years, the Company reports a 53-week fiscal year to align the fiscal year with the foregoing policy. Fiscal years 2022, which ends on July 1, 2022, and 2021, which ended on July 2, 2021, are each comprised of 52 weeks, with all quarters presented consisting of 13 weeks. |
Use of Estimates | Use of Estimates Company management has made estimates and assumptions relating to the reporting of certain assets and liabilities in conformity with U.S. GAAP. These estimates and assumptions have been applied using methodologies that are consistent throughout the periods presented with consideration given to the potential impacts of the ongoing COVID-19 pandemic. However, actual results could differ materially from these estimates and be significantly affected by the severity and duration of the COVID-19 pandemic, the extent of actions to contain or treat COVID-19, the timing, distribution, efficacy and public acceptance of vaccines around the world, additional surges of COVID-19, including the emergence of more contagious or vaccine-resistant variants, and how quickly and to what extent normal economic and operating activities can resume. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Accounting Pronouncements Recently Adopted In December 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes” (“ASU 2019-12”). ASU 2019-12 removes certain exceptions for recognizing deferred taxes for investments, performing intraperiod allocation and calculating income taxes in interim periods. The ASU also adds guidance to reduce complexity in certain areas, including recognizing deferred taxes for tax goodwill and allocating taxes to members of a consolidated group. The Company adopted this ASU on July 3, 2021, which is the beginning of fiscal 2022, and its adoption did not have a material impact on the Company’s Condensed Consolidated Financial Statements. Recently Issued Accounting Pronouncements Not Yet Adopted In August 2020, the FASB issued ASU No. 2020-06, “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity” (“ASU 2020-06”). ASU 2020-06 reduces the number of accounting models for convertible debt instruments and convertible preferred stock and results in fewer instruments with embedded conversion features being separately recognized from the host contract as compared with current standards. Those instruments that do not have a separately recognized embedded conversion feature will no longer recognize a debt issuance discount related to such a conversion feature and would recognize less interest expense on a periodic basis. Additionally, the ASU amends the calculation of the share dilution impact related to a conversion feature and eliminates the treasury method as an option. For instruments that do not have a component mandatorily settled in cash, the change will likely result in a higher amount of share dilution in the calculation of earnings per share. The Company expects to adopt this ASU in the first quarter of fiscal 2023, and is currently assessing the impact of adoption. In November 2021, the FASB issued ASU No. 2021-10, “Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance” (“ASU 2021-10”). ASU 2021-10 increases the transparency of government assistance received by requiring most business entities to disclose information about government assistance received, including (1) the types of assistance, (2) the entity’s accounting for the assistance, and (3) the effect of the assistance on an entity’s financial statements. This ASU is effective for fiscal years (and interim periods within those fiscal years) beginning after December 15, 2021, which for the Company is the first quarter of fiscal 2023. Early adoption is permitted. The Company is currently assessing the impact and timing of adoption of this ASU. |
Fair Value Measurements and Investments | Financial assets and liabilities that are remeasured and reported at fair value at each reporting period are classified and disclosed in one of the following three levels: Level 1. Quoted prices in active markets for identical assets or liabilities. Level 2. Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3. Inputs that are unobservable for the asset or liability and that are significant to the fair value of the assets or liabilities. |
Segment Reporting (Tables)
Segment Reporting (Tables) | 9 Months Ended |
Apr. 01, 2022 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | The following table summarizes the operating performance of the Company’s reportable segments: Three Months Ended Nine Months Ended April 1, April 2, April 1, April 2, Net revenue: Flash $ 2,243 $ 2,175 $ 7,353 $ 6,287 HDD 2,138 1,962 6,912 5,715 Total net revenue $ 4,381 $ 4,137 $ 14,265 $ 12,002 Gross profit: Flash $ 798 $ 653 $ 2,665 $ 1,752 HDD 592 491 2,061 1,462 Total gross profit for segments 1,390 1,144 4,726 3,214 Unallocated corporate items: Contamination related charges (203) — (203) — Stock-based compensation expense (13) (14) (36) (41) Amortization of acquired intangible assets — (39) (65) (293) Recoveries from a power outage incident 7 — 7 75 Total unallocated corporate items (209) (53) (297) (259) Consolidated gross profit $ 1,181 $ 1,091 $ 4,429 $ 2,955 Gross margin: Flash 35.6 % 30.0 % 36.2 % 27.9 % HDD 27.7 % 25.0 % 29.8 % 25.6 % Consolidated gross margin 27.0 % 26.4 % 31.0 % 24.6 % |
Schedule of Disaggregation of Revenue | The Company’s disaggregated revenue information is as follows: Three Months Ended Nine Months Ended April 1, April 2, April 1, April 2, (in millions) Revenue by End Market Cloud $ 1,774 $ 1,423 $ 5,919 $ 3,728 Client 1,732 1,767 5,439 5,386 Consumer 875 947 2,907 2,888 Total Revenue $ 4,381 $ 4,137 $ 14,265 $ 12,002 Revenue by Geography Asia $ 2,400 $ 2,215 $ 7,685 $ 6,702 Americas 1,377 1,009 4,398 3,033 Europe, Middle East and Africa 604 913 2,182 2,267 Total Revenue $ 4,381 $ 4,137 $ 14,265 $ 12,002 |
Schedule of Goodwill | The following table provides a summary of goodwill activity for the period: Flash HDD Total (in millions) Balance at July 3, 2021 $ 5,738 $ 4,328 $ 10,066 Foreign currency translation adjustment (3) (2) (5) Balance at April 1, 2022 $ 5,735 $ 4,326 $ 10,061 |
Supplemental Financial Statem_2
Supplemental Financial Statement Data (Tables) | 9 Months Ended |
Apr. 01, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Inventories | Inventories April 1, July 2, (in millions) Inventories: Raw materials and component parts $ 1,662 $ 1,623 Work-in-process 1,028 1,088 Finished goods 971 905 Total inventories $ 3,661 $ 3,616 |
Schedule of Property, Plant and Equipment, Net | Property, plant and equipment, net April 1, July 2, (in millions) Property, plant and equipment: Land $ 272 $ 278 Buildings and improvements 1,898 1,854 Machinery and equipment 8,438 7,860 Computer equipment and software 479 440 Furniture and fixtures 54 51 Construction-in-process 566 476 Property, plant and equipment, gross 11,707 10,959 Accumulated depreciation (8,219) (7,771) Property, plant and equipment, net $ 3,488 $ 3,188 |
Schedule of Intangible Assets | Intangible assets April 1, July 2, (in millions) Finite-lived intangible assets $ 5,495 $ 5,508 In-process research and development 80 80 Accumulated amortization (5,323) (5,146) Intangible assets, net $ 252 $ 442 |
Schedule of Product Warranty Liability | Product warranty liability Changes in the warranty accrual were as follows: Three Months Ended Nine Months Ended April 1, April 2, April 1, April 2, (in millions) Warranty accrual, beginning of period $ 351 $ 366 $ 363 $ 408 Charges to operations 35 27 111 86 Utilization (20) (27) (71) (82) Changes in estimate related to pre-existing warranties (11) (9) (48) (55) Warranty accrual, end of period $ 355 $ 357 $ 355 $ 357 The current portion of the warranty accrual is classified in Accrued expenses and the long-term portion is classified in Other liabilities as noted below: April 1, July 2, (in millions) Warranty accrual: Current portion (included in Accrued expenses) $ 167 $ 175 Long-term portion (included in Other liabilities) 188 188 Total warranty accrual $ 355 $ 363 |
Schedule of Other Liabilities | Other liabilities April 1, July 2, (in millions) Other liabilities: Non-current net tax payable $ 547 $ 684 Payables related to unrecognized tax benefits 996 750 Other non-current liabilities 688 633 Total other liabilities $ 2,231 $ 2,067 |
Schedule of Accumulated Other Comprehensive Income (Loss) | The following table illustrates the changes in the balances of each component of AOCI: Actuarial Pension Gains (Losses) Foreign Currency Translation Adjustment Unrealized Gains (Losses) on Derivative Contracts Total Accumulated Comprehensive Income (Loss) (in millions) Balance at July 2, 2021 $ (35) $ (38) $ (124) $ (197) Other comprehensive income (loss) before reclassifications 2 (123) (172) (293) Amounts reclassified from accumulated other comprehensive income (loss) — — 121 121 Income tax benefit related to items of other comprehensive income (loss) — — 12 12 Net current-period other comprehensive income (loss) 2 (123) (39) (160) Balance at April 1, 2022 $ (33) $ (161) $ (163) $ (357) |
Fair Value Measurements and I_2
Fair Value Measurements and Investments (Tables) | 9 Months Ended |
Apr. 01, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis | The following tables present information about the Company’s financial assets and liabilities that are measured at fair value on a recurring basis as of April 1, 2022 and July 2, 2021, and indicate the fair value hierarchy of the valuation techniques utilized to determine such values: April 1, 2022 Level 1 Level 2 Level 3 Total (in millions) Assets: Cash equivalents - Money market funds $ 53 $ — $ — $ 53 Foreign exchange contracts — 31 — 31 Total assets at fair value $ 53 $ 31 $ — $ 84 Liabilities: Foreign exchange contracts $ — $ 188 $ — $ 188 Interest rate swap contracts — 16 — 16 Total liabilities at fair value $ — $ 204 $ — $ 204 July 2, 2021 Level 1 Level 2 Level 3 Total (in millions) Assets: Cash equivalents - Money market funds $ 1,283 $ — $ — $ 1,283 Foreign exchange contracts — 14 — 14 Total assets at fair value $ 1,283 $ 14 $ — $ 1,297 Liabilities: Foreign exchange contracts $ — $ 65 $ — $ 65 Interest rate swap contracts — 80 — 80 Total liabilities at fair value $ — $ 145 $ — $ 145 |
Schedule of Related Costs And Fair Values Based On Quoted Market Prices | For financial instruments where the carrying value (which includes principal adjusted for any unamortized issuance costs, and discounts or premiums) differs from fair value (which is based on quoted market prices), the following table represents the related carrying value and fair value for each of the Company’s outstanding financial instruments. Each of the financial instruments presented below was categorized as Level 2 for all periods presented, based on the frequency of trading immediately prior to the end of the third quarter of fiscal 2022 and the fourth quarter of fiscal 2021, respectively. April 1, 2022 July 2, 2021 Carrying Fair Carrying Fair (in millions) Variable interest rate Term Loan A-1 maturing 2023 $ — $ — $ 4,327 $ 4,346 Variable interest rate Term Loan B-4 maturing 2023 — — 1,093 1,094 1.50% convertible notes due 2024 1,040 1,063 1,017 1,173 4.75% senior unsecured notes due 2026 2,290 2,342 2,288 2,556 Variable interest rate Term Loan A-2 maturing 2027 2,843 2,802 — — 2.85% senior unsecured notes due 2029 495 457 — — 3.10% senior unsecured notes due 2032 494 445 — — Total $ 7,162 $ 7,109 $ 8,725 $ 9,169 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Apr. 01, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | Debt consisted of the following as of April 1, 2022 and July 2, 2021: April 1, July 2, (in millions) Variable interest rate Term Loan A-1 maturing 2023 $ — $ 4,332 Variable interest rate Term Loan B-4 maturing 2023 — 1,093 1.50% convertible notes due 2024 1,100 1,100 4.75% senior unsecured notes due 2026 2,300 2,300 Variable interest rate Term Loan A-2 maturing 2027 2,850 — 2.85% senior unsecured notes due 2029 500 — 3.10% senior unsecured notes due 2032 500 — Total debt 7,250 8,825 Issuance costs and debt discounts (88) (100) Subtotal 7,162 8,725 Less current portion of long-term debt (75) (251) Long-term debt $ 7,087 $ 8,474 |
Pensions and Other Post-Retir_2
Pensions and Other Post-Retirement Benefit Plans (Tables) | 9 Months Ended |
Apr. 01, 2022 | |
Retirement Benefits [Abstract] | |
Schedule of Obligations and Funded Status | The following table presents the unfunded status of the benefit obligations for the Pension Plans: April 1, July 2, (in millions) Benefit obligation at end of period $ 339 $ 359 Fair value of plan assets at end of period 210 227 Unfunded status $ 129 $ 132 |
Schedule of Unfunded Amounts Recognized on Consolidated Balance Sheets | The following table presents the unfunded amounts related to the Pension Plans as recognized on the Company’s Condensed Consolidated Balance Sheets: April 1, July 2, (in millions) Current liabilities $ 1 $ 1 Non-current liabilities 128 131 Net amount recognized $ 129 $ 132 |
Related Parties and Related C_2
Related Parties and Related Commitments and Contingencies (Tables) | 9 Months Ended |
Apr. 01, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Notes Receivable and Investments in Related Parties | The following table presents the notes receivable from, and equity investments in, Flash Ventures as of April 1, 2022 and July 2, 2021: April 1, July 2, (in millions) Notes receivable, Flash Partners $ 51 $ 191 Notes receivable, Flash Alliance 130 213 Notes receivable, Flash Forward 666 561 Investment in Flash Partners 182 199 Investment in Flash Alliance 266 293 Investment in Flash Forward 122 129 Total notes receivable and investments in Flash Ventures $ 1,417 $ 1,586 |
Schedule of Variable Interest Entity Maximum Loss Exposure | The Company’s maximum reasonably estimable loss exposure (excluding lost profits) as a result of its involvement with Flash Ventures, based upon the Japanese yen to U.S. dollar exchange rate at April 1, 2022, is presented below. Investments in Flash Ventures are denominated in Japanese yen, and the maximum estimable loss exposure excludes any cumulative translation adjustment due to revaluation from the Japanese yen to the U.S. dollar. April 1, (in millions) Notes receivable $ 847 Equity investments 570 Operating lease guarantees 1,897 Inventory and prepayments 983 Maximum estimable loss exposure $ 4,297 |
Schedule of Guarantor Obligations | The following table presents the Company’s portion of the remaining guarantee obligations under the Flash Ventures’ lease facilities in both Japanese yen and U.S. dollar-equivalent, based upon the Japanese yen to U.S. dollar exchange rate as of April 1, 2022. Lease Amounts (Japanese yen, in billions) (U.S. dollar, in millions) Total guarantee obligations ¥ 223 $ 1,897 |
Schedule of Remaining Guarantee Obligations | The following table details the breakdown of the Company’s remaining guarantee obligations between the principal amortization and the purchase option exercise price at the end of the term of the Flash Ventures lease agreements, in annual installments as of April 1, 2022 in U.S. dollars, based upon the Japanese yen to U.S. dollar exchange rate as of April 1, 2022: Annual Installments Payment of Principal Amortization Purchase Option Exercise Price at Final Lease Terms Guarantee Amount (in millions) Remaining three months of 2022 $ 150 $ — $ 150 2023 516 59 575 2024 369 106 475 2025 181 97 278 2026 153 146 299 Thereafter 27 93 120 Total guarantee obligations $ 1,396 $ 501 $ 1,897 |
Leases and Other Commitments (T
Leases and Other Commitments (Tables) | 9 Months Ended |
Apr. 01, 2022 | |
Leases [Abstract] | |
Schedule of Supplemental Balance Sheet Disclosures | The following table summarizes supplemental balance sheet information related to operating leases as of April 1, 2022: Lease Amounts Minimum lease payments by fiscal year: ($ in millions) Remaining three months of 2022 $ 14 2023 48 2024 48 2025 44 2026 44 Thereafter 188 Total future minimum lease payments 386 Less: Imputed Interest 55 Present value of lease liabilities 331 Less: Current portion (included in Accrued expenses) 41 Long-term operating lease liabilities (included in Other liabilities) $ 290 Operating lease right-of-use assets (included in Other non-current assets) $ 313 Weighted average remaining lease term in years 8.4 Weighted average discount rate 3.4 % |
schedule of Supplemental Cash Flow Disclosures | The following table summarizes supplemental disclosures of operating cost and cash flow information related to operating leases: Three Months Ended Nine Months Ended April 1, April 2, April 1, April 2, (in millions) Cost of operating leases $ 15 $ 12 $ 42 $ 37 Cash paid for operating leases 13 12 37 38 Operating lease assets obtained in exchange for operating lease liabilities 9 1 132 28 |
Schedule of Long-term Purchase Agreements | As of April 1, 2022, the Company had the following minimum long-term commitments: Long-term commitments (in millions) Fiscal year: Remaining three months of 2022 $ 162 2023 560 2024 309 2025 148 2026 20 Thereafter 170 Total $ 1,369 |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 9 Months Ended |
Apr. 01, 2022 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Share-based Compensation Arrangements by Share-based Payment Award | The following tables present the Company’s stock-based compensation for equity-settled awards by type (i.e., restricted stock units (“RSUs”), restricted stock unit awards with performance conditions or market conditions (“PSUs”), and rights to purchase shares of common stock under the Company’s Employee Stock Purchase Plan (“ESPP”)) and financial statement line as well as the related tax benefit included in the Company’s Condensed Consolidated Statements of Operations: Three Months Ended Nine Months Ended April 1, April 2, April 1, April 2, (in millions) RSUs and PSUs $ 75 $ 73 $ 220 $ 212 ESPP 11 10 29 27 Total $ 86 $ 83 $ 249 $ 239 Three Months Ended Nine Months Ended April 1, April 2, April 1, April 2, (in millions) Cost of revenue $ 13 $ 14 $ 36 $ 41 Research and development 43 41 126 120 Selling, general and administrative 30 28 87 78 Subtotal 86 83 249 239 Tax benefit (9) (11) (37) (35) Total $ 77 $ 72 $ 212 $ 204 |
Schedule of Employee Service Share-based Compensation, Unrecognized Costs | The following table presents the unamortized compensation cost and weighted average service period of all unvested outstanding awards as of April 1, 2022: Unamortized Compensation Costs Weighted Average Service Period (in millions) (years) RSUs and PSUs (1) $ 589 2.3 ESPP 70 1.5 Total unamortized compensation cost $ 659 (1) Weighted average service period assumes the performance metrics are met for the PSUs. |
Schedule of Stock Option Activity | The following table summarizes stock option activity under the Company’s incentive plans. All outstanding options were exercisable at April 1, 2022: Number of Shares Weighted Average Exercise Price Per Share Weighted Average Remaining Contractual Life Aggregate Intrinsic Value (in millions) (in years) (in millions) Options outstanding at July 2, 2021 1.5 $ 72.84 1.2 $ 15 Exercised (0.2) 43.52 3 Canceled or expired (0.4) 98.24 Options outstanding at April 1, 2022 0.9 65.97 0.77 2 |
Schedule of Restricted Stock Unit | The following table summarizes RSU and PSU activity under the Company’s incentive plans: Number of Shares Weighted Average Grant Date Fair Value Aggregate Intrinsic Value at Vest Date (in millions) (in millions) RSUs and PSUs outstanding at July 2, 2021 16.1 $ 50.12 Granted 5.5 62.53 Vested (4.9) 53.93 $ 301 Forfeited (1.7) 51.77 RSUs and PSUs outstanding at April 1, 2022 15.0 53.33 |
Income Tax Expense (Tables)
Income Tax Expense (Tables) | 9 Months Ended |
Apr. 01, 2022 | |
Income Tax Disclosure [Abstract] | |
Schedule of Effective Income Tax Rate Reconciliation | The following table presents the Company’s Income tax expense and the effective tax rate: Three Months Ended Nine Months Ended April 1, April 2, April 1, April 2, ($ in millions) Income before taxes $ 262 $ 249 $ 1,612 $ 331 Income tax expense 237 52 413 132 Effective tax rate 90 % 21 % 26 % 40 % |
Schedule of Income Tax Contingencies | The following is a tabular reconciliation of the total amounts of unrecognized tax benefits excluding accrued interest and penalties for the nine months ended April 1, 2022 (in millions): Accrual balance at July 2, 2021 $ 748 Gross increases related to current year tax positions 7 Gross increases related to prior year tax positions 216 Gross decreases related to prior year tax positions (57) Settlements (2) Lapse of statute of limitations (5) Accrual balance at April 1, 2022 $ 907 |
Net Income Per Common Share (Ta
Net Income Per Common Share (Tables) | 9 Months Ended |
Apr. 01, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following table presents the computation of basic and diluted income per common share: Three Months Ended Nine Months Ended April 1, April 2, April 1, April 2, (in millions, except per share data) Net income $ 25 $ 197 $ 1,199 $ 199 Weighted average shares outstanding: Basic 313 306 312 305 Employee stock options, RSUs, PSUs and ESPP 3 7 4 3 Basic and diluted 316 313 316 308 Income per common share: Basic $ 0.08 $ 0.64 $ 3.84 $ 0.65 Diluted $ 0.08 $ 0.63 $ 3.79 $ 0.65 Anti-dilutive potential common shares excluded 5 1 4 7 |
Employee Termination, Asset I_2
Employee Termination, Asset Impairment and Other Charges (Tables) | 9 Months Ended |
Apr. 01, 2022 | |
Postemployment Benefits [Abstract] | |
Schedule of Restructuring Reserve by Type of Cost | The Company recorded the following charges related to these actions: Three Months Ended Nine Months Ended April 1, April 2, April 1, April 2, (in millions) Employee termination benefits $ 4 $ 2 $ 22 $ 27 Asset impairments and losses (gains) on disposal of assets — (70) 2 (70) Total employee termination, asset impairment, and other charges $ 4 $ (68) $ 24 $ (43) The following table presents an analysis of the components of these activities against the reserve during the nine months ended April 1, 2022: Employee Termination Benefits (in millions) Accrual balance at July 2, 2021 $ 2 Charges 22 Cash payments (20) Accrual balance at April 1, 2022 $ 4 |
Segment Reporting (Details)
Segment Reporting (Details) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Apr. 01, 2022USD ($) | Apr. 02, 2021USD ($) | Apr. 01, 2022USD ($)segment | Apr. 02, 2021USD ($) | |
Segment Reporting [Abstract] | ||||
Number of product business units | segment | 2 | |||
Number of reportable segments | segment | 2 | |||
Segment Reporting Information [Line Items] | ||||
Revenue, net | $ 4,381 | $ 4,137 | $ 14,265 | $ 12,002 |
Gross profit | 1,181 | 1,091 | 4,429 | 2,955 |
Stock-based compensation expense | 249 | 239 | ||
Total operating expenses | $ 857 | $ 774 | $ 2,600 | $ 2,410 |
Gross margin, percentage | 27.00% | 26.40% | 31.00% | 24.60% |
Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenue, net | $ 4,381 | $ 4,137 | $ 14,265 | $ 12,002 |
Gross profit | 1,390 | 1,144 | 4,726 | 3,214 |
Corporate, Non-Segment | ||||
Segment Reporting Information [Line Items] | ||||
Contamination related charges | (203) | 0 | (203) | 0 |
Stock-based compensation expense | (13) | (14) | (36) | (41) |
Amortization of acquired intangible assets | 0 | (39) | (65) | (293) |
Recoveries from a power outage incident | 7 | 0 | 7 | 75 |
Total operating expenses | $ (209) | $ (53) | $ (297) | $ (259) |
Flash | ||||
Segment Reporting Information [Line Items] | ||||
Gross margin, percentage | 35.60% | 30.00% | 36.20% | 27.90% |
Flash | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenue, net | $ 2,243 | $ 2,175 | $ 7,353 | $ 6,287 |
Gross profit | $ 798 | $ 653 | $ 2,665 | $ 1,752 |
HDD | ||||
Segment Reporting Information [Line Items] | ||||
Gross margin, percentage | 27.70% | 25.00% | 29.80% | 25.60% |
HDD | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenue, net | $ 2,138 | $ 1,962 | $ 6,912 | $ 5,715 |
Gross profit | $ 592 | $ 491 | $ 2,061 | $ 1,462 |
Segment Information - Disaggreg
Segment Information - Disaggregation of Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Apr. 01, 2022 | Apr. 02, 2021 | Apr. 01, 2022 | Apr. 02, 2021 | |
Disaggregation of Revenue [Line Items] | ||||
Revenue, net | $ 4,381 | $ 4,137 | $ 14,265 | $ 12,002 |
Asia | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue, net | 2,400 | 2,215 | 7,685 | 6,702 |
Americas | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue, net | 1,377 | 1,009 | 4,398 | 3,033 |
Europe, Middle East and Africa | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue, net | 604 | 913 | 2,182 | 2,267 |
Cloud | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue, net | 1,774 | 1,423 | 5,919 | 3,728 |
Client | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue, net | 1,732 | 1,767 | 5,439 | 5,386 |
Consumer | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue, net | $ 875 | $ 947 | $ 2,907 | $ 2,888 |
Segment Information - Additiona
Segment Information - Additional Information (Details) | 3 Months Ended | 9 Months Ended | ||
Apr. 01, 2022 | Apr. 02, 2021 | Apr. 01, 2022 | Apr. 02, 2021 | |
Revenue from Contract with Customer | Customer Concentration Risk | Top Ten Customers | ||||
Concentration Risk [Line Items] | ||||
Concentration risk, percentage | 44.00% | 42.00% | 43.00% | 40.00% |
Segment Information - Goodwill
Segment Information - Goodwill Rollforward (Details) $ in Millions | 9 Months Ended |
Apr. 01, 2022USD ($) | |
Goodwill [Roll Forward] | |
Balance at July 3, 2021 | $ 10,066 |
Foreign currency translation adjustment | (5) |
Balance at April 1, 2022 | 10,061 |
Flash | |
Goodwill [Roll Forward] | |
Balance at July 3, 2021 | 5,738 |
Foreign currency translation adjustment | (3) |
Balance at April 1, 2022 | 5,735 |
HDD | |
Goodwill [Roll Forward] | |
Balance at July 3, 2021 | 4,328 |
Foreign currency translation adjustment | (2) |
Balance at April 1, 2022 | $ 4,326 |
Revenues - Revenue Remaining Pe
Revenues - Revenue Remaining Performance Obligation (Details) $ in Millions | Apr. 01, 2022USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, amount | $ 42 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-04-02 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, amount | $ 10 |
Revenue, remaining performance obligation, amount | 3 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-07-02 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, amount | $ 30 |
Revenue, remaining performance obligation, amount | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-07-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, amount | $ 2 |
Revenue, remaining performance obligation, amount |
Supplemental Financial Statem_3
Supplemental Financial Statement Data - Additional Information (Details) - USD ($) $ in Millions | 9 Months Ended | ||
Apr. 01, 2022 | Apr. 02, 2021 | Jul. 02, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Proceeds on sale of trade accounts receivable | $ 100 | $ 233 | |
Factored receivables outstanding | $ 100 | $ 0 |
Supplemental Financial Statem_4
Supplemental Financial Statement Data - Inventory (Details) - USD ($) $ in Millions | Apr. 01, 2022 | Jul. 02, 2021 |
Inventories: | ||
Raw materials and component parts | $ 1,662 | $ 1,623 |
Work-in-process | 1,028 | 1,088 |
Finished goods | 971 | 905 |
Total inventories | $ 3,661 | $ 3,616 |
Supplemental Financial Statem_5
Supplemental Financial Statement Data - Property, Plant and Equipment (Details) - USD ($) $ in Millions | Apr. 01, 2022 | Jul. 02, 2021 |
Property, plant and equipment: | ||
Property, plant and equipment, gross | $ 11,707 | $ 10,959 |
Accumulated depreciation | (8,219) | (7,771) |
Property, plant and equipment, net | 3,488 | 3,188 |
Land | ||
Property, plant and equipment: | ||
Property, plant and equipment, gross | 272 | 278 |
Buildings and improvements | ||
Property, plant and equipment: | ||
Property, plant and equipment, gross | 1,898 | 1,854 |
Machinery and equipment | ||
Property, plant and equipment: | ||
Property, plant and equipment, gross | 8,438 | 7,860 |
Computer equipment and software | ||
Property, plant and equipment: | ||
Property, plant and equipment, gross | 479 | 440 |
Furniture and fixtures | ||
Property, plant and equipment: | ||
Property, plant and equipment, gross | 54 | 51 |
Construction-in-process | ||
Property, plant and equipment: | ||
Property, plant and equipment, gross | $ 566 | $ 476 |
Supplemental Financial Statem_6
Supplemental Financial Statement Data - Intangible Assets (Details) - USD ($) $ in Millions | Apr. 01, 2022 | Jul. 02, 2021 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Finite-lived intangible assets | $ 5,495 | $ 5,508 |
In-process research and development | 80 | 80 |
Accumulated amortization | (5,323) | (5,146) |
Intangible assets, net | $ 252 | $ 442 |
Supplemental Financial Statem_7
Supplemental Financial Statement Data - Warranty Accrual Roll Forward (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Apr. 01, 2022 | Apr. 02, 2021 | Apr. 01, 2022 | Apr. 02, 2021 | |
Movement in Standard Product Warranty Accrual [Roll Forward] | ||||
Warranty accrual, beginning of period | $ 351 | $ 366 | $ 363 | $ 408 |
Charges to operations | 35 | 27 | 111 | 86 |
Utilization | (20) | (27) | (71) | (82) |
Changes in estimate related to pre-existing warranties | (11) | (9) | (48) | (55) |
Warranty accrual, end of period | $ 355 | $ 357 | $ 355 | $ 357 |
Supplemental Financial Statem_8
Supplemental Financial Statement Data - Total Warranty Accrual (Details) - USD ($) $ in Millions | Apr. 01, 2022 | Dec. 31, 2021 | Jul. 02, 2021 | Apr. 02, 2021 | Jan. 01, 2021 | Jul. 03, 2020 |
Warranty accrual: | ||||||
Current portion (included in Accrued expenses) | $ 167 | $ 175 | ||||
Long-term portion (included in Other liabilities) | 188 | 188 | ||||
Total warranty accrual | $ 355 | $ 351 | $ 363 | $ 357 | $ 366 | $ 408 |
Supplemental Financial Statem_9
Supplemental Financial Statement Data - Other Liabilities (Details) - USD ($) $ in Millions | Apr. 01, 2022 | Jul. 02, 2021 |
Other liabilities: | ||
Non-current net tax payable | $ 547 | $ 684 |
Payables related to unrecognized tax benefits | 996 | 750 |
Other non-current liabilities | 688 | 633 |
Total other liabilities | $ 2,231 | $ 2,067 |
Supplemental Financial State_10
Supplemental Financial Statement Data - Accumulated Other Comprehensive Income Roll Forward (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Apr. 01, 2022 | Apr. 02, 2021 | Apr. 01, 2022 | Apr. 02, 2021 | |
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Beginning balance | $ 12,018 | $ 9,829 | $ 10,721 | $ 9,551 |
Other comprehensive income (loss) before reclassifications | (293) | |||
Amounts reclassified from accumulated other comprehensive income (loss) | 121 | |||
Income tax benefit (expense) related to items of other comprehensive income (loss) | 15 | 17 | 12 | 6 |
Other comprehensive loss, net of tax | (140) | (160) | (160) | (53) |
Ending balance | 11,984 | 9,949 | 11,984 | 9,949 |
Losses reclassified out of AOCI related to foreign exchange contracts | 14 | 83 | ||
Losses reclassified out of AOCI related to interest rate swap contracts | 13 | 38 | ||
Actuarial Pension Gains (Losses) | ||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Beginning balance | (35) | |||
Other comprehensive income (loss) before reclassifications | 2 | |||
Amounts reclassified from accumulated other comprehensive income (loss) | 0 | |||
Income tax benefit (expense) related to items of other comprehensive income (loss) | 0 | |||
Other comprehensive loss, net of tax | 2 | |||
Ending balance | (33) | (33) | ||
Foreign Currency Translation Adjustment | ||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Beginning balance | (38) | |||
Other comprehensive income (loss) before reclassifications | (123) | |||
Amounts reclassified from accumulated other comprehensive income (loss) | 0 | |||
Income tax benefit (expense) related to items of other comprehensive income (loss) | 0 | |||
Other comprehensive loss, net of tax | (123) | |||
Ending balance | (161) | (161) | ||
Unrealized Gains (Losses) on Derivative Contracts | ||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Beginning balance | (124) | |||
Other comprehensive income (loss) before reclassifications | (172) | |||
Amounts reclassified from accumulated other comprehensive income (loss) | 121 | |||
Income tax benefit (expense) related to items of other comprehensive income (loss) | 12 | |||
Other comprehensive loss, net of tax | (39) | |||
Ending balance | (163) | (163) | ||
Accumulated Other Comprehensive Income (Loss) | ||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Beginning balance | (217) | (50) | (197) | (157) |
Ending balance | $ (357) | $ (210) | $ (357) | $ (210) |
Fair Value Measurements and I_3
Fair Value Measurements and Investments - Financial Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) - Fair Value, Measurements, Recurring - USD ($) $ in Millions | Apr. 01, 2022 | Jul. 02, 2021 |
Assets: | ||
Total assets at fair value | $ 84 | $ 1,297 |
Liabilities: | ||
Total liabilities at fair value | 204 | 145 |
Cash equivalents - Money market funds | ||
Assets: | ||
Cash equivalents - Money market funds | 53 | 1,283 |
Foreign exchange contracts | ||
Assets: | ||
Foreign exchange contracts | 31 | 14 |
Liabilities: | ||
Derivative liability | 188 | 65 |
Interest rate swap contracts | ||
Liabilities: | ||
Derivative liability | 16 | 80 |
Level 1 | ||
Assets: | ||
Total assets at fair value | 53 | 1,283 |
Liabilities: | ||
Total liabilities at fair value | 0 | 0 |
Level 1 | Cash equivalents - Money market funds | ||
Assets: | ||
Cash equivalents - Money market funds | 53 | 1,283 |
Level 1 | Foreign exchange contracts | ||
Assets: | ||
Foreign exchange contracts | 0 | 0 |
Liabilities: | ||
Derivative liability | 0 | 0 |
Level 1 | Interest rate swap contracts | ||
Liabilities: | ||
Derivative liability | 0 | 0 |
Level 2 | ||
Assets: | ||
Total assets at fair value | 31 | 14 |
Liabilities: | ||
Total liabilities at fair value | 204 | 145 |
Level 2 | Cash equivalents - Money market funds | ||
Assets: | ||
Cash equivalents - Money market funds | 0 | 0 |
Level 2 | Foreign exchange contracts | ||
Assets: | ||
Foreign exchange contracts | 31 | 14 |
Liabilities: | ||
Derivative liability | 188 | 65 |
Level 2 | Interest rate swap contracts | ||
Liabilities: | ||
Derivative liability | 16 | 80 |
Level 3 | ||
Assets: | ||
Total assets at fair value | 0 | 0 |
Liabilities: | ||
Total liabilities at fair value | 0 | 0 |
Level 3 | Cash equivalents - Money market funds | ||
Assets: | ||
Cash equivalents - Money market funds | 0 | 0 |
Level 3 | Foreign exchange contracts | ||
Assets: | ||
Foreign exchange contracts | 0 | 0 |
Liabilities: | ||
Derivative liability | 0 | 0 |
Level 3 | Interest rate swap contracts | ||
Liabilities: | ||
Derivative liability | $ 0 | $ 0 |
Fair Value Measurements and I_4
Fair Value Measurements and Investments - Debt Instrument Fair Value (Details) - USD ($) $ in Millions | Apr. 01, 2022 | Jul. 02, 2021 |
1.50% convertible notes due 2024 | Convertible Debt | ||
Debt Instrument [Line Items] | ||
Debt instrument, interest rate (percentage) | 1.50% | 1.50% |
4.75% senior unsecured notes due 2026 | ||
Debt Instrument [Line Items] | ||
Debt instrument, interest rate (percentage) | 4.75% | 4.75% |
2.85% senior unsecured notes due 2029 | ||
Debt Instrument [Line Items] | ||
Debt instrument, interest rate (percentage) | 2.85% | 2.85% |
3.10% senior unsecured notes due 2032 | ||
Debt Instrument [Line Items] | ||
Debt instrument, interest rate (percentage) | 3.10% | 3.10% |
Level 2 | Carrying Value | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 7,162 | $ 8,725 |
Level 2 | Carrying Value | Variable interest rate Term Loan A-1 maturing 2023 | ||
Debt Instrument [Line Items] | ||
Long-term debt | 0 | 4,327 |
Level 2 | Carrying Value | Variable interest rate Term Loan B-4 maturing 2023 | ||
Debt Instrument [Line Items] | ||
Long-term debt | 0 | 1,093 |
Level 2 | Carrying Value | 1.50% convertible notes due 2024 | ||
Debt Instrument [Line Items] | ||
Long-term debt | 1,040 | 1,017 |
Level 2 | Carrying Value | 4.75% senior unsecured notes due 2026 | ||
Debt Instrument [Line Items] | ||
Long-term debt | 2,290 | 2,288 |
Level 2 | Carrying Value | Variable interest rate Term Loan A-2 maturing 2027 | ||
Debt Instrument [Line Items] | ||
Long-term debt | 2,843 | 0 |
Level 2 | Carrying Value | 2.85% senior unsecured notes due 2029 | ||
Debt Instrument [Line Items] | ||
Long-term debt | 495 | 0 |
Level 2 | Carrying Value | 3.10% senior unsecured notes due 2032 | ||
Debt Instrument [Line Items] | ||
Long-term debt | 494 | 0 |
Level 2 | Fair Value | ||
Debt Instrument [Line Items] | ||
Long-term debt | 7,109 | 9,169 |
Level 2 | Fair Value | Variable interest rate Term Loan A-1 maturing 2023 | ||
Debt Instrument [Line Items] | ||
Long-term debt | 0 | 4,346 |
Level 2 | Fair Value | Variable interest rate Term Loan B-4 maturing 2023 | ||
Debt Instrument [Line Items] | ||
Long-term debt | 0 | 1,094 |
Level 2 | Fair Value | 1.50% convertible notes due 2024 | ||
Debt Instrument [Line Items] | ||
Long-term debt | 1,063 | 1,173 |
Level 2 | Fair Value | 4.75% senior unsecured notes due 2026 | ||
Debt Instrument [Line Items] | ||
Long-term debt | 2,342 | 2,556 |
Level 2 | Fair Value | Variable interest rate Term Loan A-2 maturing 2027 | ||
Debt Instrument [Line Items] | ||
Long-term debt | 2,802 | 0 |
Level 2 | Fair Value | 2.85% senior unsecured notes due 2029 | ||
Debt Instrument [Line Items] | ||
Long-term debt | 457 | 0 |
Level 2 | Fair Value | 3.10% senior unsecured notes due 2032 | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 445 | $ 0 |
Derivatives Instruments and H_2
Derivatives Instruments and Hedging Activities (Details) | 9 Months Ended |
Apr. 01, 2022 | |
Foreign Exchange Forward Contracts Designated | |
Derivatives, Fair Value [Line Items] | |
Derivative, term of contract (to not exceed) | 12 months |
Debt - Schedule of Debt (Detail
Debt - Schedule of Debt (Details) - USD ($) $ in Millions | Apr. 01, 2022 | Dec. 31, 2021 | Jul. 02, 2021 |
Debt Instrument [Line Items] | |||
Debt | $ 7,250 | $ 8,825 | |
Issuance costs and debt discounts | (88) | (100) | |
Subtotal | 7,162 | 8,725 | |
Less current portion of long-term debt | (75) | (251) | |
Long-term debt | 7,087 | 8,474 | |
Variable interest rate Term Loan A-1 maturing 2023 | |||
Debt Instrument [Line Items] | |||
Debt | 0 | $ 3,000 | 4,332 |
Variable interest rate Term Loan B-4 maturing 2023 | |||
Debt Instrument [Line Items] | |||
Debt | $ 0 | $ 1,093 | |
4.75% senior unsecured notes due 2026 | |||
Debt Instrument [Line Items] | |||
Debt instrument, interest rate (percentage) | 4.75% | 4.75% | |
Debt | $ 2,300 | $ 2,300 | |
Variable interest rate Term Loan A-2 maturing 2027 | |||
Debt Instrument [Line Items] | |||
Debt | 2,850 | $ 0 | |
Issuance costs and debt discounts | $ (7) | ||
2.85% senior unsecured notes due 2029 | |||
Debt Instrument [Line Items] | |||
Debt instrument, interest rate (percentage) | 2.85% | 2.85% | |
Debt | $ 500 | $ 0 | |
3.10% senior unsecured notes due 2032 | |||
Debt Instrument [Line Items] | |||
Debt instrument, interest rate (percentage) | 3.10% | 3.10% | |
Debt | $ 500 | $ 0 | |
Convertible Debt | 1.50% convertible notes due 2024 | |||
Debt Instrument [Line Items] | |||
Debt instrument, interest rate (percentage) | 1.50% | 1.50% | |
Debt | $ 1,100 | $ 1,100 |
Debt - Additional Information (
Debt - Additional Information (Details) - USD ($) | Jan. 07, 2022 | Dec. 31, 2021 | Apr. 01, 2022 | Apr. 02, 2021 | Dec. 10, 2021 | Jul. 02, 2021 |
Debt Instrument [Line Items] | ||||||
Repayment of debt | $ 5,575,000,000 | $ 673,000,000 | ||||
Outstanding principal balance | 7,250,000,000 | $ 8,825,000,000 | ||||
Unamortized issuance cost | 88,000,000 | 100,000,000 | ||||
July 1, 2022 through March 31, 2023 | ||||||
Debt Instrument [Line Items] | ||||||
Quarterly installment payments | 19,000,000 | |||||
July 1, 2022 thereafter | ||||||
Debt Instrument [Line Items] | ||||||
Quarterly installment payments | 38,000,000 | |||||
Variable interest rate Term Loan B-4 maturing 2023 | ||||||
Debt Instrument [Line Items] | ||||||
Outstanding principal balance | $ 0 | $ 1,093,000,000 | ||||
2.85% senior unsecured notes due 2029 | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, interest rate (percentage) | 2.85% | 2.85% | ||||
Outstanding principal balance | $ 500,000,000 | $ 0 | ||||
2.85% senior unsecured notes due 2029 | Senior Notes | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, face amount | $ 500,000,000 | |||||
Debt instrument, interest rate (percentage) | 2.85% | |||||
3.10% senior unsecured notes due 2032 | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, interest rate (percentage) | 3.10% | 3.10% | ||||
Outstanding principal balance | $ 500,000,000 | $ 0 | ||||
3.10% senior unsecured notes due 2032 | Senior Notes | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, face amount | $ 500,000,000 | |||||
Debt instrument, interest rate (percentage) | 3.10% | |||||
Variable interest rate Term Loan A-1 maturing 2023 | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, face amount | $ 126,000,000 | |||||
Repayment of debt | 1,210,000,000 | |||||
Outstanding principal balance | $ 3,000,000,000 | 0 | 4,332,000,000 | |||
Variable interest rate Term Loan A-2 maturing 2027 | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, face amount | $ 3,000,000,000 | |||||
Outstanding principal balance | 2,850,000,000 | $ 0 | ||||
Unamortized issuance cost | 7,000,000 | |||||
Variable interest rate Term Loan A-2 maturing 2027 | SOFR | ||||||
Debt Instrument [Line Items] | ||||||
Variable interest rate | 1.375% | |||||
Variable interest rate Term Loan A-2 maturing 2027 | Minimum | SOFR | ||||||
Debt Instrument [Line Items] | ||||||
Variable interest rate | 1.125% | |||||
Variable interest rate Term Loan A-2 maturing 2027 | Minimum | Base Rate | ||||||
Debt Instrument [Line Items] | ||||||
Variable interest rate | 0.125% | |||||
Variable interest rate Term Loan A-2 maturing 2027 | Maximum | SOFR | ||||||
Debt Instrument [Line Items] | ||||||
Variable interest rate | 2.00% | |||||
Variable interest rate Term Loan A-2 maturing 2027 | Maximum | Base Rate | ||||||
Debt Instrument [Line Items] | ||||||
Variable interest rate | 1.00% | |||||
2027 Revolving Credit Facility | Revolving Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Maximum borrowing capacity | $ 2,250,000,000 | |||||
Commitment fee (in percent) | 0.20% | |||||
2027 Revolving Credit Facility | Revolving Credit Facility | SOFR | ||||||
Debt Instrument [Line Items] | ||||||
Variable interest rate | 1.375% | |||||
2027 Revolving Credit Facility | Revolving Credit Facility | Minimum | ||||||
Debt Instrument [Line Items] | ||||||
Commitment fee (in percent) | 0.12% | |||||
2027 Revolving Credit Facility | Revolving Credit Facility | Minimum | SOFR | ||||||
Debt Instrument [Line Items] | ||||||
Variable interest rate | 1.125% | |||||
2027 Revolving Credit Facility | Revolving Credit Facility | Minimum | Base Rate | ||||||
Debt Instrument [Line Items] | ||||||
Variable interest rate | 0.125% | |||||
2027 Revolving Credit Facility | Revolving Credit Facility | Maximum | ||||||
Debt Instrument [Line Items] | ||||||
Commitment fee (in percent) | 0.35% | |||||
2027 Revolving Credit Facility | Revolving Credit Facility | Maximum | SOFR | ||||||
Debt Instrument [Line Items] | ||||||
Variable interest rate | 2.00% | |||||
2027 Revolving Credit Facility | Revolving Credit Facility | Maximum | Base Rate | ||||||
Debt Instrument [Line Items] | ||||||
Variable interest rate | 1.00% | |||||
Senior Notes due 2029 | ||||||
Debt Instrument [Line Items] | ||||||
Unamortized issuance cost | 5,000,000 | |||||
Senior Notes due 2032 | ||||||
Debt Instrument [Line Items] | ||||||
Unamortized issuance cost | $ 6,000,000 |
Pensions and Other Post-Retir_3
Pensions and Other Post-Retirement Benefit Plans - Additional Information (Details) | 9 Months Ended |
Apr. 01, 2022 | |
Retirement Benefits [Abstract] | |
Expected long-term rate of return on plan assets | 2.50% |
Pensions and Other Post-Retir_4
Pensions and Other Post-Retirement Benefit Plans - Obligations and Funded Status (Details) - USD ($) $ in Millions | Apr. 01, 2022 | Jul. 02, 2021 |
Retirement Benefits [Abstract] | ||
Benefit obligation at end of period | $ 339 | $ 359 |
Fair value of plan assets at end of period | 210 | 227 |
Unfunded status | $ 129 | $ 132 |
Pensions and Other Post-Retir_5
Pensions and Other Post-Retirement Benefit Plans - Unfunded Amounts Recognized on Consolidated Balance Sheets (Details) - USD ($) $ in Millions | Apr. 01, 2022 | Jul. 02, 2021 |
Retirement Benefits [Abstract] | ||
Current liabilities | $ 1 | $ 1 |
Non-current liabilities | 128 | 131 |
Net amount recognized | $ 129 | $ 132 |
Related Parties and Related C_3
Related Parties and Related Commitments and Contingencies - Additional Information (Details) | 3 Months Ended | 6 Months Ended | 9 Months Ended | ||||||
Apr. 01, 2022USD ($)entity | Dec. 31, 2021USD ($) | Apr. 02, 2021USD ($) | Jan. 01, 2021USD ($) | Dec. 31, 2021USD ($) | Jan. 01, 2021USD ($) | Apr. 01, 2022USD ($)entity | Apr. 02, 2021USD ($) | Jul. 02, 2021USD ($) | |
Guarantor Obligations [Line Items] | |||||||||
Number of legal entities | entity | 3 | 3 | |||||||
Accounts payable to related parties | $ 396,000,000 | $ 396,000,000 | $ 398,000,000 | ||||||
Investment funding commitments, percentage | 50.00% | 50.00% | |||||||
Depreciation prepayments | $ 482,000,000 | $ 482,000,000 | |||||||
2022 | 142,000,000 | 142,000,000 | |||||||
2023 | 314,000,000 | 314,000,000 | |||||||
2024 | 26,000,000 | 26,000,000 | |||||||
Insurance recovery recorded in cost of revenue | $ 7,000,000 | $ 45,000,000 | $ 7,000,000 | $ 75,000,000 | |||||
Costs incurred with unexpected power outage incident | $ 203,000,000 | $ 203,000,000 | |||||||
Unis Venture | |||||||||
Guarantor Obligations [Line Items] | |||||||||
Equity method investment, ownership percentage | 49.00% | 49.00% | |||||||
Revenue from Contract with Customer | Unis Venture | Product Concentration Risk | |||||||||
Guarantor Obligations [Line Items] | |||||||||
Concentration risk, percentage | 5.00% | 3.00% | 5.00% | 3.00% | |||||
Accounts Receivable Benchmark | Product Concentration Risk | Unis Venture | |||||||||
Guarantor Obligations [Line Items] | |||||||||
Concentration risk, percentage | 6.00% | 5.00% | |||||||
Unissoft (Wuxi) Group Co Ltd. | Unis Venture | |||||||||
Guarantor Obligations [Line Items] | |||||||||
Partner's ownership in venture business | 51.00% | 51.00% | |||||||
Western Digital Corp | Minimum | |||||||||
Guarantor Obligations [Line Items] | |||||||||
Investment funding commitments, percentage | 49.90% | 49.90% | |||||||
Western Digital Corp | Maximum | |||||||||
Guarantor Obligations [Line Items] | |||||||||
Investment funding commitments, percentage | 50.00% | 50.00% | |||||||
Flash Ventures | |||||||||
Guarantor Obligations [Line Items] | |||||||||
Investments in flash ventures | $ 1,100,000,000 | $ 1,100,000,000 | $ 3,400,000,000 | $ 3,300,000,000 | |||||
Accounts payable to related parties | $ 396,000,000 | $ 396,000,000 | $ 398,000,000 |
Related Parties and Related C_4
Related Parties and Related Commitments and Contingencies - Equity Investments (Details) - USD ($) $ in Millions | Apr. 01, 2022 | Jul. 02, 2021 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total notes receivable and investments in Flash Ventures | $ 1,417 | $ 1,586 |
Flash Partners Ltd | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Notes receivable, related parties | 51 | 191 |
Investments | 182 | 199 |
Flash Alliance Ltd | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Notes receivable, related parties | 130 | 213 |
Investments | 266 | 293 |
Flash Forward Ltd | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Notes receivable, related parties | 666 | 561 |
Investments | 122 | 129 |
Flash Ventures | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total notes receivable and investments in Flash Ventures | $ 1,417 | $ 1,586 |
Related Parties and Related C_5
Related Parties and Related Commitments and Contingencies - Maximum Loss Exposure (Details) - Apr. 01, 2022 - Flash Ventures $ in Millions, ¥ in Billions | USD ($) | JPY (¥) |
Guarantor Obligations [Line Items] | ||
VIE, reporting entity involvement, maximum loss exposure, amount | $ 4,297 | |
Notes receivable | ||
Guarantor Obligations [Line Items] | ||
VIE, reporting entity involvement, maximum loss exposure, amount | 847 | |
Equity investments | ||
Guarantor Obligations [Line Items] | ||
VIE, reporting entity involvement, maximum loss exposure, amount | 570 | |
Operating lease guarantees | ||
Guarantor Obligations [Line Items] | ||
Operating lease guarantees | 1,897 | ¥ 223 |
Inventory and prepayments | ||
Guarantor Obligations [Line Items] | ||
Inventory and prepayments | $ 983 |
Related Parties and Related C_6
Related Parties and Related Commitments and Contingencies - JV Lease Guarantees (Details) - Apr. 01, 2022 $ in Millions, ¥ in Billions | USD ($) | JPY (¥) |
Operating lease guarantees | Flash Ventures | ||
Loss Contingencies [Line Items] | ||
Total guarantee obligations | $ 1,897 | ¥ 223 |
Related Parties and Related C_7
Related Parties and Related Commitments and Contingencies - Joint Venture Lease Amounts (Details) - Flash Ventures $ in Millions | Apr. 01, 2022USD ($) |
Guarantor Obligations [Line Items] | |
Remaining three months of 2022 | $ 150 |
2023 | 575 |
2024 | 475 |
2025 | 278 |
2026 | 299 |
Thereafter | 120 |
Total guarantee obligations | 1,897 |
Payment of Principal Amortization | |
Guarantor Obligations [Line Items] | |
Remaining three months of 2022 | 150 |
2023 | 516 |
2024 | 369 |
2025 | 181 |
2026 | 153 |
Thereafter | 27 |
Total guarantee obligations | 1,396 |
Purchase Option Exercise Price at Final Lease Terms | |
Guarantor Obligations [Line Items] | |
Remaining three months of 2022 | 0 |
2023 | 59 |
2024 | 106 |
2025 | 97 |
2026 | 146 |
Thereafter | 93 |
Total guarantee obligations | $ 501 |
Leases and Other Commitments -
Leases and Other Commitments - Supplemental Balance Sheet (Details) $ in Millions | Apr. 01, 2022USD ($) |
Minimum lease payments by fiscal year: | |
Remaining three months of 2022 | $ 14 |
2023 | 48 |
2024 | 48 |
2025 | 44 |
2026 | 44 |
Thereafter | 188 |
Total future minimum lease payments | 386 |
Less: Imputed Interest | 55 |
Present value of lease liabilities | 331 |
Less: Current portion (included in Accrued expenses) | 41 |
Long-term operating lease liabilities (included in Other liabilities) | 290 |
Operating lease right-of-use assets (included in Other non-current assets) | $ 313 |
Weighted average remaining lease term in years | 8 years 4 months 24 days |
Weighted average discount rate | 3.40% |
Leases and Other Commitments _2
Leases and Other Commitments - Supplemental Cash Flow (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Apr. 01, 2022 | Apr. 02, 2021 | Apr. 01, 2022 | Apr. 02, 2021 | |
Leases [Abstract] | ||||
Cost of operating leases | $ 15 | $ 12 | $ 42 | $ 37 |
Cash paid for operating leases | 13 | 12 | 37 | 38 |
Operating lease assets obtained in exchange for operating lease liabilities | $ 9 | $ 1 | $ 132 | $ 28 |
Leases and Other Commitments _3
Leases and Other Commitments - Long-Term Commitments (Details) $ in Millions | Apr. 01, 2022USD ($) |
Fiscal year: | |
Remaining three months of 2022 | $ 162 |
2023 | 560 |
2024 | 309 |
2025 | 148 |
2026 | 20 |
Thereafter | 170 |
Total | $ 1,369 |
Shareholders' Equity - Stock-Ba
Shareholders' Equity - Stock-Based Compensation Expense (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Apr. 01, 2022 | Apr. 02, 2021 | Apr. 01, 2022 | Apr. 02, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expenses on stock-based compensation | $ 86 | $ 83 | $ 249 | $ 239 |
Tax benefit | (9) | (11) | (37) | (35) |
Total | 77 | 72 | 212 | 204 |
Cost of revenue | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expenses on stock-based compensation | 13 | 14 | 36 | 41 |
Research and development | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expenses on stock-based compensation | 43 | 41 | 126 | 120 |
Selling, general and administrative | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expenses on stock-based compensation | 30 | 28 | 87 | 78 |
RSUs and PSUs | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expenses on stock-based compensation | 75 | 73 | 220 | 212 |
ESPP | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expenses on stock-based compensation | $ 11 | $ 10 | $ 29 | $ 27 |
Shareholders' Equity - Unrecogn
Shareholders' Equity - Unrecognized Share-based Compensation (Details) $ in Millions | 9 Months Ended |
Apr. 01, 2022USD ($) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unamortized Compensation Costs | $ 659 |
RSUs and PSUs | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unamortized Compensation Costs | $ 589 |
Weighted Average Service Period | 2 years 3 months 18 days |
ESPP | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unamortized Compensation Costs | $ 70 |
Weighted Average Service Period | 1 year 6 months |
Shareholders' Equity - Stock Op
Shareholders' Equity - Stock Option Activity (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 9 Months Ended | 12 Months Ended |
Apr. 01, 2022 | Jul. 02, 2021 | |
Number of Shares | ||
Options outstanding, beginning balance (in shares) | 1.5 | |
Exercised (in shares) | (0.2) | |
Canceled or expired (in shares) | (0.4) | |
Options outstanding, ending balance (in shares) | 0.9 | 1.5 |
Weighted Average Exercise Price Per Share | ||
Options outstanding, beginning balance, exercise price (in dollars per share) | $ 72.84 | |
Exercised, exercise price (in dollars per share) | 43.52 | |
Canceled or expired, exercise price (in dollars per share) | 98.24 | |
Options outstanding, ending balance, exercise price (in dollars per share) | $ 65.97 | $ 72.84 |
Options outstanding, weighted average remaining contractual term | 9 months 7 days | 1 year 2 months 12 days |
Aggregate Intrinsic Value | ||
Options outstanding, beginning balance, intrinsic value | $ 15 | |
Exercised, intrinsic value | 3 | |
Options outstanding, ending balance, intrinsic value | $ 2 | $ 15 |
Shareholders' Equity - Restrict
Shareholders' Equity - Restricted Stock Units And Performance Share Units (Details) - Restricted Stock Units And Performance Share Units $ / shares in Units, shares in Millions, $ in Millions | 9 Months Ended |
Apr. 01, 2022USD ($)$ / sharesshares | |
Number of Shares | |
Outstanding, beginning balance (in shares) | shares | 16.1 |
Granted (in shares) | shares | 5.5 |
Vested (in shares) | shares | (4.9) |
Forfeited (in shares) | shares | (1.7) |
Outstanding, ending balance (in shares) | shares | 15 |
Weighted Average Grant Date Fair Value | |
Outstanding, beginning balance, grant date fair value (in dollars per share) | $ / shares | $ 50.12 |
Granted, grant date fair value (in dollars per share) | $ / shares | 62.53 |
Vested, grant date fair value (in dollars per share) | $ / shares | 53.93 |
Forfeited, grant date fair value (in dollars per share) | $ / shares | 51.77 |
Outstanding, ending balance, grant date fair value (in dollars per share) | $ / shares | $ 53.33 |
Aggregate value of restricted stock awards vested | $ | $ 301 |
Shareholders' Equity - Share Re
Shareholders' Equity - Share Repurchase Program (Details) | Apr. 01, 2022USD ($) |
Stock Repurchase Program Effective Until July 25, 2023 | |
Equity, Class of Treasury Stock [Line Items] | |
Stock repurchase program, number of shares authorized to be repurchased | $ 5,000,000,000 |
Share Repurchase Program | |
Equity, Class of Treasury Stock [Line Items] | |
Stock repurchase program, remaining authorized repurchase, amount | $ 4,500,000,000 |
Income Tax Expense - Tax Expens
Income Tax Expense - Tax Expense and Effective Tax Rate (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Apr. 01, 2022 | Apr. 02, 2021 | Apr. 01, 2022 | Apr. 02, 2021 | |
Income Tax Disclosure [Abstract] | ||||
Income before taxes | $ 262 | $ 249 | $ 1,612 | $ 331 |
Income tax expense | $ 237 | $ 52 | $ 413 | $ 132 |
Effective tax rate | 90.00% | 21.00% | 26.00% | 40.00% |
Income Tax Expense - Additional
Income Tax Expense - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Apr. 01, 2022 | Apr. 02, 2021 | Apr. 01, 2022 | Apr. 02, 2021 | Jul. 02, 2021 | |
Income Tax Disclosure [Line Items] | |||||
Increase to unrecognized tax benefits as a result of ongoing discussions with various taxing authorities | $ 194 | $ 35 | $ 219 | $ 35 | |
Unrecognized Tax Benefits, Increase Resulting From Business Realignment Activities | $ 22 | 22 | |||
Net tax deficiencies | 11 | ||||
Additional tax expense from re-measurement of deferred tax liabilities | $ 10 | ||||
Federal tax related to adjustments for transfer pricing | 1,600 | ||||
Increase in unrecognized tax benefits, including interest | 224 | ||||
Unrecognized tax benefits | 907 | 907 | $ 748 | ||
Penalties and interest accrued on unrecognized tax benefits | 231 | 231 | |||
Potential payables related to unrecognized tax benefits | 996 | 996 | |||
Mandatory deemed repatriation tax obligations | 100 | 100 | |||
Minimum | |||||
Income Tax Disclosure [Line Items] | |||||
Unrecognized tax benefits | 80 | 80 | |||
Penalties and interest accrued on unrecognized tax benefits | 600 | 600 | |||
Maximum | |||||
Income Tax Disclosure [Line Items] | |||||
Unrecognized tax benefits | 100 | 100 | |||
Penalties and interest accrued on unrecognized tax benefits | $ 700 | 700 | |||
Tax Years 2008 Through 2015 | |||||
Income Tax Disclosure [Line Items] | |||||
Federal tax related to adjustments for transfer pricing | $ 449 |
Income Tax Expense - Unrecogniz
Income Tax Expense - Unrecognized Tax Benefits (Details) $ in Millions | 9 Months Ended |
Apr. 01, 2022USD ($) | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |
Unrecognized tax benefit, beginning balance | $ 748 |
Gross increases related to current year tax positions | 7 |
Gross increases related to prior year tax positions | 216 |
Gross decreases related to prior year tax positions | (57) |
Settlements | (2) |
Lapse of statute of limitations | (5) |
Unrecognized tax benefit, ending balance | $ 907 |
Net Income Per Common Share (De
Net Income Per Common Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||||||
Apr. 01, 2022 | Dec. 31, 2021 | Oct. 01, 2021 | Apr. 02, 2021 | Jan. 01, 2021 | Oct. 02, 2020 | Apr. 01, 2022 | Apr. 02, 2021 | |
Earnings Per Share [Abstract] | ||||||||
Net income | $ 25 | $ 564 | $ 610 | $ 197 | $ 62 | $ (60) | $ 1,199 | $ 199 |
Weighted average shares outstanding: | ||||||||
Basic (in shares) | 313 | 306 | 312 | 305 | ||||
Employee stock options, RSUs, PSUs, ESPP (in shares) | 3 | 7 | 4 | 3 | ||||
Diluted (in shares) | 316 | 313 | 316 | 308 | ||||
Income per common share: | ||||||||
Basic (in dollars per share) | $ 0.08 | $ 0.64 | $ 3.84 | $ 0.65 | ||||
Diluted (in dollars per share) | $ 0.08 | $ 0.63 | $ 3.79 | $ 0.65 | ||||
Anti-dilutive potential common shares excluded (in shares) | 5 | 1 | 4 | 7 |
Employee Termination, Asset I_3
Employee Termination, Asset Impairment and Other Charges - Expense Recognition (Details) - Business Realignment - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Apr. 01, 2022 | Apr. 02, 2021 | Apr. 01, 2022 | Apr. 02, 2021 | |
Restructuring Cost and Reserve [Line Items] | ||||
Employee termination and other charges: | $ 4 | $ 2 | $ 22 | $ 27 |
Asset impairments and losses (gains) on disposal of assets | 0 | (70) | 2 | (70) |
Total employee termination, asset impairment, and other charges | $ 4 | $ (68) | $ 24 | $ (43) |
Employee Termination, Asset I_4
Employee Termination, Asset Impairment and Other Charges - Business Realignment Activities (Details) - Employee Termination Benefits - Business Realignment $ in Millions | 9 Months Ended |
Apr. 01, 2022USD ($) | |
Restructuring Reserve [Roll Forward] | |
Accrual balance at July 2, 2021 | $ 2 |
Charges | 22 |
Cash payments | (20) |
Accrual balance at April 1, 2022 | $ 4 |