Seagate Technology plc0001137789false2021Q1--07-0200011377892020-07-042020-10-02xbrli:shares00011377892020-10-26iso4217:USD00011377892020-10-0200011377892020-07-0300011377892019-06-292019-10-04iso4217:USDxbrli:shares00011377892019-06-2800011377892019-10-040001137789us-gaap:CommonStockMember2020-07-030001137789us-gaap:AdditionalPaidInCapitalMember2020-07-030001137789us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-07-030001137789us-gaap:RetainedEarningsMember2020-07-030001137789us-gaap:RetainedEarningsMember2020-07-042020-10-020001137789us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-07-042020-10-020001137789us-gaap:CommonStockMember2020-07-042020-10-020001137789us-gaap:AdditionalPaidInCapitalMember2020-07-042020-10-020001137789us-gaap:CommonStockMember2020-10-020001137789us-gaap:AdditionalPaidInCapitalMember2020-10-020001137789us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-10-020001137789us-gaap:RetainedEarningsMember2020-10-020001137789us-gaap:CommonStockMember2019-06-280001137789us-gaap:AdditionalPaidInCapitalMember2019-06-280001137789us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-06-280001137789us-gaap:RetainedEarningsMember2019-06-280001137789srt:CumulativeEffectPeriodOfAdoptionAdjustmentMemberus-gaap:RetainedEarningsMember2019-06-280001137789srt:CumulativeEffectPeriodOfAdoptionAdjustmentMember2019-06-280001137789us-gaap:RetainedEarningsMember2019-06-292019-10-040001137789us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-06-292019-10-040001137789us-gaap:CommonStockMember2019-06-292019-10-040001137789us-gaap:AdditionalPaidInCapitalMember2019-06-292019-10-040001137789us-gaap:CommonStockMember2019-10-040001137789us-gaap:AdditionalPaidInCapitalMember2019-10-040001137789us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-10-040001137789us-gaap:RetainedEarningsMember2019-10-040001137789us-gaap:MoneyMarketFundsMember2020-10-020001137789stx:TimedepositsandcertificatesofdepositMember2020-10-020001137789us-gaap:DebtSecuritiesMember2020-10-020001137789us-gaap:CashAndCashEquivalentsMember2020-10-020001137789us-gaap:OtherCurrentAssetsMember2020-10-020001137789us-gaap:OtherAssetsMember2020-10-0200011377892019-06-292020-07-030001137789us-gaap:MoneyMarketFundsMember2020-07-030001137789stx:TimedepositsandcertificatesofdepositMember2020-07-030001137789us-gaap:OtherDebtSecuritiesMember2020-07-030001137789us-gaap:CashAndCashEquivalentsMember2020-07-030001137789us-gaap:OtherCurrentAssetsMember2020-07-030001137789us-gaap:OtherAssetsMember2020-07-030001137789us-gaap:AvailableforsaleSecuritiesMember2020-07-030001137789us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember2020-07-030001137789us-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetUnamortizedGainLossMember2020-07-030001137789us-gaap:AccumulatedTranslationAdjustmentMember2020-07-030001137789us-gaap:AccumulatedTranslationAdjustmentMember2020-07-042020-10-020001137789us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember2020-07-042020-10-020001137789us-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetUnamortizedGainLossMember2020-07-042020-10-020001137789us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember2020-10-020001137789us-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetUnamortizedGainLossMember2020-10-020001137789us-gaap:AccumulatedTranslationAdjustmentMember2020-10-020001137789us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember2019-06-280001137789us-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetUnamortizedGainLossMember2019-06-280001137789us-gaap:AccumulatedTranslationAdjustmentMember2019-06-280001137789us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember2019-06-292019-10-040001137789us-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetUnamortizedGainLossMember2019-06-292019-10-040001137789us-gaap:AccumulatedTranslationAdjustmentMember2019-06-292019-10-040001137789us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember2019-10-040001137789us-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetUnamortizedGainLossMember2019-10-040001137789us-gaap:AccumulatedTranslationAdjustmentMember2019-10-040001137789us-gaap:RevolvingCreditFacilityMemberstx:A2019RevolvingCreditFacilityMember2019-02-200001137789us-gaap:MediumTermNotesMemberstx:TermLoanMember2019-02-200001137789us-gaap:RevolvingCreditFacilityMemberstx:A2019RevolvingCreditFacilityMembersrt:MinimumMember2019-02-20xbrli:pure0001137789us-gaap:RevolvingCreditFacilityMemberstx:A2019RevolvingCreditFacilityMember2019-02-202019-02-200001137789us-gaap:LineOfCreditMemberstx:A2019RevolvingCreditFacilityMember2019-02-200001137789stx:A2019RevolvingCreditFacilityMemberus-gaap:BridgeLoanMember2019-02-200001137789us-gaap:MediumTermNotesMemberstx:TermLoanMember2019-09-172019-09-170001137789us-gaap:RevolvingCreditFacilityMemberstx:TermLoanMember2020-07-042020-10-020001137789us-gaap:RevolvingCreditFacilityMemberstx:A2019RevolvingCreditFacilityMember2020-07-042020-10-020001137789us-gaap:SeniorNotesMemberstx:SeniorNotes4.25PercentDueMarch2022Member2017-02-030001137789us-gaap:SeniorNotesMemberstx:SeniorNotes4.25PercentDueMarch2022Member2020-07-042020-10-020001137789us-gaap:SeniorNotesMemberstx:SeniorNotes4.25PercentDueMarch2022Member2019-09-180001137789us-gaap:SeniorNotesMemberstx:SeniorNotes4.25PercentDueMarch2022Member2019-06-292019-10-040001137789us-gaap:SeniorNotesMemberstx:SeniorNotes4.75PercentDueJune2023Member2013-05-220001137789us-gaap:SeniorNotesMemberstx:SeniorNotes4.75PercentDueJune2023Member2020-07-042020-10-020001137789us-gaap:SeniorNotesMemberstx:SeniorNotes4.75PercentDueJune2023Member2020-10-020001137789us-gaap:SeniorNotesMemberstx:SeniorNotes4.75PercentDueJune2023Member2019-09-180001137789us-gaap:SeniorNotesMemberstx:SeniorNotes4.75PercentDueJune2023Member2019-06-292019-10-040001137789us-gaap:SeniorNotesMemberstx:SeniorNotes4.875PercentDueMarch2024Member2017-02-030001137789us-gaap:SeniorNotesMemberstx:SeniorNotes4.75PercentDueJanuary2025Member2014-05-280001137789us-gaap:SeniorNotesMemberstx:SeniorNotes4.75PercentDueJanuary2025Member2020-07-042020-10-020001137789us-gaap:SeniorNotesMemberstx:Seniornote4.875percentdueJune2027Member2015-05-140001137789us-gaap:SeniorNotesMemberstx:SeniorNote4091PercentDueJune2029Member2020-06-180001137789stx:SeniorNotes4125PercentDueJanuary2031Memberus-gaap:SeniorNotesMember2020-06-100001137789stx:Seniornote5.75percentdueDecember2034Memberus-gaap:SeniorNotesMember2014-12-02stx:numberOfEmployees00011377892020-06-012020-06-010001137789stx:June2020RestructuringPlanMemberus-gaap:EmployeeSeveranceMember2020-07-030001137789stx:June2020RestructuringPlanMemberus-gaap:FacilityClosingMember2020-07-030001137789stx:OtherRestructuringPlansMemberus-gaap:EmployeeSeveranceMember2020-07-030001137789stx:OtherRestructuringPlansMemberus-gaap:FacilityClosingMember2020-07-030001137789us-gaap:RestructuringChargesMember2020-07-030001137789stx:June2020RestructuringPlanMemberus-gaap:EmployeeSeveranceMember2020-07-042020-10-020001137789stx:June2020RestructuringPlanMemberus-gaap:FacilityClosingMember2020-07-042020-10-020001137789stx:OtherRestructuringPlansMemberus-gaap:EmployeeSeveranceMember2020-07-042020-10-020001137789stx:OtherRestructuringPlansMemberus-gaap:FacilityClosingMember2020-07-042020-10-020001137789us-gaap:RestructuringChargesMember2020-07-042020-10-020001137789stx:June2020RestructuringPlanMemberus-gaap:EmployeeSeveranceMember2020-10-020001137789stx:June2020RestructuringPlanMemberus-gaap:FacilityClosingMember2020-10-020001137789stx:OtherRestructuringPlansMemberus-gaap:EmployeeSeveranceMember2020-10-020001137789stx:OtherRestructuringPlansMemberus-gaap:FacilityClosingMember2020-10-020001137789us-gaap:RestructuringChargesMember2020-10-020001137789stx:OtherRestructuringPlansMemberus-gaap:EmployeeSeveranceMember2019-06-280001137789stx:OtherRestructuringPlansMemberus-gaap:FacilityClosingMember2019-06-280001137789us-gaap:RestructuringChargesMember2019-06-280001137789stx:OtherRestructuringPlansMemberus-gaap:EmployeeSeveranceMember2019-06-292019-10-040001137789stx:OtherRestructuringPlansMemberus-gaap:FacilityClosingMember2019-06-292019-10-040001137789us-gaap:RestructuringChargesMember2019-06-292019-10-040001137789stx:OtherRestructuringPlansMemberus-gaap:EmployeeSeveranceMember2019-10-040001137789stx:OtherRestructuringPlansMemberus-gaap:FacilityClosingMember2019-10-040001137789us-gaap:RestructuringChargesMember2019-10-040001137789us-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:InterestRateSwapMember2020-10-020001137789us-gaap:CashFlowHedgingMember2020-07-042020-10-020001137789us-gaap:CashFlowHedgingMember2019-06-292020-07-030001137789us-gaap:CashFlowHedgingMember2020-10-020001137789currency:SGDus-gaap:ForeignExchangeForwardMemberus-gaap:DesignatedAsHedgingInstrumentMember2020-10-020001137789us-gaap:NondesignatedMembercurrency:SGDus-gaap:ForeignExchangeForwardMember2020-10-020001137789us-gaap:ForeignExchangeForwardMemberus-gaap:DesignatedAsHedgingInstrumentMembercurrency:THB2020-10-020001137789us-gaap:NondesignatedMemberus-gaap:ForeignExchangeForwardMembercurrency:THB2020-10-020001137789us-gaap:ForeignExchangeForwardMemberus-gaap:DesignatedAsHedgingInstrumentMembercurrency:CNY2020-10-020001137789us-gaap:NondesignatedMemberus-gaap:ForeignExchangeForwardMembercurrency:CNY2020-10-020001137789currency:GBPus-gaap:ForeignExchangeForwardMemberus-gaap:DesignatedAsHedgingInstrumentMember2020-10-020001137789us-gaap:NondesignatedMembercurrency:GBPus-gaap:ForeignExchangeForwardMember2020-10-020001137789us-gaap:ForeignExchangeForwardMemberus-gaap:DesignatedAsHedgingInstrumentMember2020-10-020001137789us-gaap:NondesignatedMemberus-gaap:ForeignExchangeForwardMember2020-10-020001137789currency:SGDus-gaap:ForeignExchangeForwardMemberus-gaap:DesignatedAsHedgingInstrumentMember2020-07-030001137789us-gaap:NondesignatedMemberus-gaap:ForeignExchangeForwardMembercurrency:THB2020-07-030001137789us-gaap:ForeignExchangeForwardMemberus-gaap:DesignatedAsHedgingInstrumentMembercurrency:THB2020-07-030001137789us-gaap:NondesignatedMembercurrency:SGDus-gaap:ForeignExchangeForwardMember2020-07-030001137789us-gaap:ForeignExchangeForwardMemberus-gaap:DesignatedAsHedgingInstrumentMembercurrency:CNY2020-07-030001137789us-gaap:NondesignatedMemberus-gaap:ForeignExchangeForwardMembercurrency:CNY2020-07-030001137789currency:GBPus-gaap:ForeignExchangeForwardMemberus-gaap:DesignatedAsHedgingInstrumentMember2020-07-030001137789us-gaap:NondesignatedMembercurrency:GBPus-gaap:ForeignExchangeForwardMember2020-07-030001137789us-gaap:ForeignExchangeForwardMemberus-gaap:DesignatedAsHedgingInstrumentMember2020-07-030001137789us-gaap:NondesignatedMemberus-gaap:ForeignExchangeForwardMember2020-07-030001137789us-gaap:NondesignatedMemberus-gaap:TotalReturnSwapMember2020-10-020001137789us-gaap:OtherCurrentAssetsMemberus-gaap:ForeignExchangeForwardMemberus-gaap:DesignatedAsHedgingInstrumentMember2020-10-020001137789stx:AccruedExpensesMemberus-gaap:ForeignExchangeForwardMemberus-gaap:DesignatedAsHedgingInstrumentMember2020-10-020001137789us-gaap:OtherCurrentAssetsMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:InterestRateSwapMember2020-10-020001137789stx:AccruedExpensesMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:InterestRateSwapMember2020-10-020001137789us-gaap:NondesignatedMemberus-gaap:OtherCurrentAssetsMemberus-gaap:ForeignExchangeForwardMember2020-10-020001137789us-gaap:NondesignatedMemberstx:AccruedExpensesMemberus-gaap:ForeignExchangeForwardMember2020-10-020001137789us-gaap:NondesignatedMemberus-gaap:OtherCurrentAssetsMemberus-gaap:TotalReturnSwapMember2020-10-020001137789us-gaap:NondesignatedMemberstx:AccruedExpensesMemberus-gaap:TotalReturnSwapMember2020-10-020001137789us-gaap:OtherCurrentAssetsMemberus-gaap:ForeignExchangeForwardMemberus-gaap:DesignatedAsHedgingInstrumentMember2020-07-030001137789stx:AccruedExpensesMemberus-gaap:ForeignExchangeForwardMemberus-gaap:DesignatedAsHedgingInstrumentMember2020-07-030001137789us-gaap:OtherCurrentAssetsMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:InterestRateSwapMember2020-07-030001137789stx:AccruedExpensesMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:InterestRateSwapMember2020-07-030001137789us-gaap:NondesignatedMemberus-gaap:OtherCurrentAssetsMemberus-gaap:ForeignExchangeForwardMember2020-07-030001137789us-gaap:NondesignatedMemberstx:AccruedExpensesMemberus-gaap:ForeignExchangeForwardMember2020-07-030001137789us-gaap:NondesignatedMemberus-gaap:OtherCurrentAssetsMemberus-gaap:TotalReturnSwapMember2020-07-030001137789us-gaap:NondesignatedMemberstx:AccruedExpensesMemberus-gaap:TotalReturnSwapMember2020-07-030001137789us-gaap:OtherNonoperatingIncomeExpenseMemberus-gaap:ForeignExchangeForwardMember2020-07-042020-10-020001137789us-gaap:OperatingExpenseMemberus-gaap:TotalReturnSwapMember2020-07-042020-10-020001137789us-gaap:OtherNonoperatingIncomeExpenseMemberus-gaap:InterestRateSwapMember2020-07-042020-10-020001137789us-gaap:OtherNonoperatingIncomeExpenseMemberus-gaap:ForeignExchangeForwardMember2019-06-292019-10-040001137789us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMember2020-10-020001137789us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMember2020-10-020001137789us-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMemberus-gaap:FairValueInputsLevel3Member2020-10-020001137789us-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMember2020-10-020001137789stx:TimedepositsandcertificatesofdepositMemberus-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2020-10-020001137789stx:TimedepositsandcertificatesofdepositMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2020-10-020001137789stx:TimedepositsandcertificatesofdepositMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Member2020-10-020001137789stx:TimedepositsandcertificatesofdepositMemberus-gaap:FairValueMeasurementsRecurringMember2020-10-020001137789us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2020-10-020001137789us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2020-10-020001137789us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Member2020-10-020001137789us-gaap:FairValueMeasurementsRecurringMember2020-10-020001137789us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:DebtSecuritiesMember2020-10-020001137789us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:DebtSecuritiesMember2020-10-020001137789us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Memberus-gaap:DebtSecuritiesMember2020-10-020001137789us-gaap:FairValueMeasurementsRecurringMemberus-gaap:DebtSecuritiesMember2020-10-020001137789us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:DerivativeFinancialInstrumentsAssetsMember2020-10-020001137789us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:DerivativeFinancialInstrumentsAssetsMember2020-10-020001137789us-gaap:FairValueMeasurementsRecurringMemberus-gaap:DerivativeFinancialInstrumentsAssetsMemberus-gaap:FairValueInputsLevel3Member2020-10-020001137789us-gaap:FairValueMeasurementsRecurringMemberus-gaap:DerivativeFinancialInstrumentsAssetsMember2020-10-020001137789us-gaap:DerivativeFinancialInstrumentsLiabilitiesMemberus-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2020-10-020001137789us-gaap:FairValueInputsLevel2Memberus-gaap:DerivativeFinancialInstrumentsLiabilitiesMemberus-gaap:FairValueMeasurementsRecurringMember2020-10-020001137789us-gaap:DerivativeFinancialInstrumentsLiabilitiesMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Member2020-10-020001137789us-gaap:DerivativeFinancialInstrumentsLiabilitiesMemberus-gaap:FairValueMeasurementsRecurringMember2020-10-020001137789us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMember2020-07-030001137789us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMember2020-07-030001137789us-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMemberus-gaap:FairValueInputsLevel3Member2020-07-030001137789us-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMember2020-07-030001137789stx:TimedepositsandcertificatesofdepositMemberus-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2020-07-030001137789stx:TimedepositsandcertificatesofdepositMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2020-07-030001137789stx:TimedepositsandcertificatesofdepositMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Member2020-07-030001137789stx:TimedepositsandcertificatesofdepositMemberus-gaap:FairValueMeasurementsRecurringMember2020-07-030001137789us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2020-07-030001137789us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2020-07-030001137789us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Member2020-07-030001137789us-gaap:FairValueMeasurementsRecurringMember2020-07-030001137789us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:DebtSecuritiesMember2020-07-030001137789us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:DebtSecuritiesMember2020-07-030001137789us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Memberus-gaap:DebtSecuritiesMember2020-07-030001137789us-gaap:FairValueMeasurementsRecurringMemberus-gaap:DebtSecuritiesMember2020-07-030001137789us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:DerivativeFinancialInstrumentsAssetsMember2020-07-030001137789us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:DerivativeFinancialInstrumentsAssetsMember2020-07-030001137789us-gaap:FairValueMeasurementsRecurringMemberus-gaap:DerivativeFinancialInstrumentsAssetsMemberus-gaap:FairValueInputsLevel3Member2020-07-030001137789us-gaap:FairValueMeasurementsRecurringMemberus-gaap:DerivativeFinancialInstrumentsAssetsMember2020-07-030001137789us-gaap:DerivativeFinancialInstrumentsLiabilitiesMemberus-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2020-07-030001137789us-gaap:FairValueInputsLevel2Memberus-gaap:DerivativeFinancialInstrumentsLiabilitiesMemberus-gaap:FairValueMeasurementsRecurringMember2020-07-030001137789us-gaap:DerivativeFinancialInstrumentsLiabilitiesMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Member2020-07-030001137789us-gaap:DerivativeFinancialInstrumentsLiabilitiesMemberus-gaap:FairValueMeasurementsRecurringMember2020-07-030001137789us-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:CostmethodInvestmentsMemberus-gaap:OtherCurrentAssetsMemberus-gaap:FairValueInputsLevel3Member2020-10-020001137789us-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:CostmethodInvestmentsMemberus-gaap:OtherCurrentAssetsMemberus-gaap:FairValueInputsLevel3Member2020-07-030001137789us-gaap:OtherNonoperatingIncomeExpenseMemberus-gaap:CostmethodInvestmentsMember2020-07-042020-10-020001137789us-gaap:OtherNonoperatingIncomeExpenseMemberus-gaap:CostmethodInvestmentsMember2019-06-292019-10-040001137789stx:SeniorNotes4.25PercentDueMarch2022Memberus-gaap:CarryingReportedAmountFairValueDisclosureMember2020-10-020001137789stx:SeniorNotes4.25PercentDueMarch2022Memberus-gaap:EstimateOfFairValueFairValueDisclosureMember2020-10-020001137789stx:SeniorNotes4.25PercentDueMarch2022Memberus-gaap:CarryingReportedAmountFairValueDisclosureMember2020-07-030001137789stx:SeniorNotes4.25PercentDueMarch2022Memberus-gaap:EstimateOfFairValueFairValueDisclosureMember2020-07-030001137789us-gaap:CarryingReportedAmountFairValueDisclosureMemberstx:SeniorNotes4.75PercentDueJune2023Member2020-10-020001137789stx:SeniorNotes4.75PercentDueJune2023Memberus-gaap:EstimateOfFairValueFairValueDisclosureMember2020-10-020001137789us-gaap:CarryingReportedAmountFairValueDisclosureMemberstx:SeniorNotes4.75PercentDueJune2023Member2020-07-030001137789stx:SeniorNotes4.75PercentDueJune2023Memberus-gaap:EstimateOfFairValueFairValueDisclosureMember2020-07-030001137789stx:SeniorNotes4.875PercentDueMarch2024Memberus-gaap:CarryingReportedAmountFairValueDisclosureMember2020-10-020001137789stx:SeniorNotes4.875PercentDueMarch2024Memberus-gaap:EstimateOfFairValueFairValueDisclosureMember2020-10-020001137789stx:SeniorNotes4.875PercentDueMarch2024Memberus-gaap:CarryingReportedAmountFairValueDisclosureMember2020-07-030001137789stx:SeniorNotes4.875PercentDueMarch2024Memberus-gaap:EstimateOfFairValueFairValueDisclosureMember2020-07-030001137789stx:SeniorNotes4.75PercentDueJanuary2025Memberus-gaap:CarryingReportedAmountFairValueDisclosureMember2020-10-020001137789stx:SeniorNotes4.75PercentDueJanuary2025Memberus-gaap:EstimateOfFairValueFairValueDisclosureMember2020-10-020001137789stx:SeniorNotes4.75PercentDueJanuary2025Memberus-gaap:CarryingReportedAmountFairValueDisclosureMember2020-07-030001137789stx:SeniorNotes4.75PercentDueJanuary2025Memberus-gaap:EstimateOfFairValueFairValueDisclosureMember2020-07-030001137789stx:Seniornote4.875percentdueJune2027Memberus-gaap:CarryingReportedAmountFairValueDisclosureMember2020-10-020001137789stx:Seniornote4.875percentdueJune2027Memberus-gaap:EstimateOfFairValueFairValueDisclosureMember2020-10-020001137789stx:Seniornote4.875percentdueJune2027Memberus-gaap:CarryingReportedAmountFairValueDisclosureMember2020-07-030001137789stx:Seniornote4.875percentdueJune2027Memberus-gaap:EstimateOfFairValueFairValueDisclosureMember2020-07-030001137789stx:SeniorNote4091PercentDueJune2029Memberus-gaap:CarryingReportedAmountFairValueDisclosureMember2020-10-020001137789stx:SeniorNote4091PercentDueJune2029Memberus-gaap:EstimateOfFairValueFairValueDisclosureMember2020-10-020001137789stx:SeniorNote4091PercentDueJune2029Memberus-gaap:CarryingReportedAmountFairValueDisclosureMember2020-07-030001137789stx:SeniorNote4091PercentDueJune2029Memberus-gaap:EstimateOfFairValueFairValueDisclosureMember2020-07-030001137789stx:SeniorNotes4125PercentDueJanuary2031Memberus-gaap:CarryingReportedAmountFairValueDisclosureMember2020-10-020001137789stx:SeniorNotes4125PercentDueJanuary2031Memberus-gaap:EstimateOfFairValueFairValueDisclosureMember2020-10-020001137789stx:SeniorNotes4125PercentDueJanuary2031Memberus-gaap:CarryingReportedAmountFairValueDisclosureMember2020-07-030001137789stx:SeniorNotes4125PercentDueJanuary2031Memberus-gaap:EstimateOfFairValueFairValueDisclosureMember2020-07-030001137789stx:Seniornote5.75percentdueDecember2034Memberus-gaap:CarryingReportedAmountFairValueDisclosureMember2020-10-020001137789stx:Seniornote5.75percentdueDecember2034Memberus-gaap:EstimateOfFairValueFairValueDisclosureMember2020-10-020001137789stx:Seniornote5.75percentdueDecember2034Memberus-gaap:CarryingReportedAmountFairValueDisclosureMember2020-07-030001137789stx:Seniornote5.75percentdueDecember2034Memberus-gaap:EstimateOfFairValueFairValueDisclosureMember2020-07-030001137789stx:LIBORbasedTermLoanDueSeptember2025Memberus-gaap:CarryingReportedAmountFairValueDisclosureMember2020-10-020001137789stx:LIBORbasedTermLoanDueSeptember2025Memberus-gaap:EstimateOfFairValueFairValueDisclosureMember2020-10-020001137789stx:LIBORbasedTermLoanDueSeptember2025Memberus-gaap:CarryingReportedAmountFairValueDisclosureMember2020-07-030001137789stx:LIBORbasedTermLoanDueSeptember2025Memberus-gaap:EstimateOfFairValueFairValueDisclosureMember2020-07-030001137789us-gaap:CarryingReportedAmountFairValueDisclosureMember2020-10-020001137789us-gaap:EstimateOfFairValueFairValueDisclosureMember2020-10-020001137789us-gaap:CarryingReportedAmountFairValueDisclosureMember2020-07-030001137789us-gaap:EstimateOfFairValueFairValueDisclosureMember2020-07-030001137789stx:OEMsMember2020-07-042020-10-020001137789stx:OEMsMember2019-06-292019-10-040001137789stx:DistributorsMember2020-07-042020-10-020001137789stx:DistributorsMember2019-06-292019-10-040001137789us-gaap:RetailMember2020-07-042020-10-020001137789us-gaap:RetailMember2019-06-292019-10-040001137789srt:AsiaPacificMember2020-07-042020-10-020001137789srt:AsiaPacificMember2019-06-292019-10-040001137789srt:AmericasMember2020-07-042020-10-020001137789srt:AmericasMember2019-06-292019-10-040001137789us-gaap:EMEAMember2020-07-042020-10-020001137789us-gaap:EMEAMember2019-06-292019-10-040001137789srt:MinimumMember2020-07-042020-10-020001137789srt:MaximumMember2020-07-042020-10-020001137789us-gaap:CommonStockMemberus-gaap:SubsequentEventMember2020-10-222020-10-220001137789us-gaap:CommonStockMemberus-gaap:SubsequentEventMember2020-10-21



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
____________________________ 
FORM 10-Q
___________________________ 
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended October 2, 2020
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from:                to                
Commission File Number 001-31560
 _______________________________________
SEAGATE TECHNOLOGY PUBLIC LIMITED COMPANY
(Exact name of registrant as specified in its charter)
 _______________________________________
Ireland 98-0648577
(State or other jurisdiction of(I.R.S. Employer
incorporation or organization) Identification Number)
38/39 Fitzwilliam Square
Dublin 2, Ireland
(Address of principal executive offices)
D02 NX53
(Zip Code)
 
Telephone: (353) (1) 234-3136
(Registrant’s telephone number, including area code)
_______________________________________ 
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Ordinary Shares, par value $0.00001 per shareSTXThe NASDAQ Global Select Market
_______________________________________ 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer 
Non-accelerated filer Smaller reporting company 
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No
As of October 26, 2020, 256,932,251 of the registrant’s ordinary shares, par value $0.00001 per share, were issued and outstanding.




INDEX
SEAGATE TECHNOLOGY PLC

   PAGE NO.
    
  
 
  
  
  
  
  
 
 
 
 
 
 
 
 
 
 
 
  

2

Table of Contents
PART I
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Table of ContentsPage

See Notes to Condensed Consolidated Financial Statements.
3


Table of Contents
SEAGATE TECHNOLOGY PLC
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions)

 October 2,
2020
July 3,
2020
(unaudited)
ASSETS  
Current assets:  
Cash and cash equivalents$1,664 $1,722 
Accounts receivable, net866 1,115 
Inventories1,323 1,142 
Other current assets141 135 
Total current assets3,994 4,114 
Property, equipment and leasehold improvements, net2,167 2,129 
Goodwill1,237 1,237 
Other intangible assets, net45 58 
Deferred income taxes1,125 1,120 
Other assets, net294 272 
Total Assets$8,862 $8,930 
LIABILITIES AND EQUITY  
Current liabilities:  
Accounts payable$1,795 $1,808 
Accrued employee compensation157 224 
Accrued warranty64 69 
Current portion of long-term debt25 19 
Accrued expenses603 602 
Total current liabilities2,644 2,722 
Long-term accrued warranty78 82 
Other non-current liabilities181 183 
Long-term debt4,138 4,156 
Total Liabilities7,041 7,143 
Commitments and contingencies (See Notes 11 and 13)
Shareholders’ Equity:
Ordinary shares and additional paid-in capital6,814 6,757 
Accumulated other comprehensive loss(46)(66)
Accumulated deficit(4,947)(4,904)
Total Equity1,821 1,787 
Total Liabilities and Equity$8,862 $8,930 




See Notes to Condensed Consolidated Financial Statements.
4


Table of Contents
SEAGATE TECHNOLOGY PLC
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per share data)
(Unaudited)
 For the Three Months Ended
 October 2,
2020
October 4,
2019
Revenue$2,314 $2,578 
 
Cost of revenue1,718 1,907 
Product development223 255 
Marketing and administrative118 122 
Amortization of intangibles3 4 
Restructuring and other, net1 17 
Total operating expenses2,063 2,305 
 
Income from operations251 273 
 
Interest income1 11 
Interest expense(50)(55)
Other, net19 (31)
Other expense, net(30)(75)
 
Income before income taxes221 198 
Benefit for income taxes(2)(2)
Net income$223 $200 
 
Net income per share:
Basic$0.87 $0.75 
Diluted0.86 0.74 
Number of shares used in per share calculations:  
Basic257 266 
Diluted259 270 
Cash dividends declared per ordinary share
$0.65 $0.63 


See Notes to Condensed Consolidated Financial Statements.
5


Table of Contents
SEAGATE TECHNOLOGY PLC
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In millions)
(Unaudited)
 For the Three Months Ended
 October 2,
2020
October 4,
2019
Net income$223 $200 
Other comprehensive income (loss), net of tax:
Change in net unrealized loss on cash flow hedges:
Net unrealized gains (losses) arising during the period4 (1)
Losses (gains) reclassified into earnings  
Net change4 (1)
Change in unrealized components of post-retirement plans:
Net unrealized (losses) gains arising during the period  
Losses (gains) reclassified into earnings1  
Net change1  
Foreign currency translation adjustments15 (5)
Total other comprehensive income (loss), net of tax20 (6)
Comprehensive income $243 $194 

See Notes to Condensed Consolidated Financial Statements.
6


Table of Contents
SEAGATE TECHNOLOGY PLC
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)
 For the Three Months Ended
 October 2,
2020
October 4,
2019
OPERATING ACTIVITIES  
Net income$223 $200 
Adjustments to reconcile net income to net cash provided by operating activities: 
Depreciation and amortization99 92 
Share-based compensation28 26 
Deferred income taxes(18)(12)
Other non-cash operating activities, net(8)44 
Changes in operating assets and liabilities: 
Accounts receivable, net249 (77)
Inventories(181)(65)
Accounts payable(24)281 
Accrued employee compensation(67)(20)
Accrued expenses, income taxes and warranty(21)(7)
Other assets and liabilities 17 (6)
Net cash provided by operating activities297 456 
INVESTING ACTIVITIES  
Acquisition of property, equipment and leasehold improvements(111)(147)
Proceeds from sale of investments11  
Purchases of investments(4)(4)
Net cash used in investing activities(104)(151)
FINANCING ACTIVITIES 
Redemption and repurchase of debt(13)(645)
Dividends to shareholders(167)(170)
Repurchases of ordinary shares(68)(450)
Taxes paid related to net share settlement of equity awards(31)(37)
Net proceeds from issuance of long-term debt 498 
Proceeds from issuance of ordinary shares under employee share plans29 39 
Other financing activities, net(1) 
Net cash used in financing activities(251)(765)
Effect of foreign currency exchange rate changes on cash, cash equivalents and restricted cash (5)
Decrease in cash, cash equivalents and restricted cash(58)(465)
Cash, cash equivalents and restricted cash at the beginning of the period1,724 2,251 
Cash, cash equivalents and restricted cash at the end of the period$1,666 $1,786 

See Notes to Condensed Consolidated Financial Statements.
7


Table of Contents
SEAGATE TECHNOLOGY PLC
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY 
For the Three Months Ended October 2, 2020 and October 4, 2019
(In millions)
(Unaudited)
Number of Ordinary SharesPar Value of SharesAdditional Paid-in CapitalAccumulated Other Comprehensive LossAccumulated DeficitTotal
Balance at July 3, 2020257 $ $6,757 $(66)$(4,904)$1,787 
Net income223 223 
Other comprehensive income20 20 
Issuance of ordinary shares under employee share plans
3 29 29 
Repurchases of ordinary shares
(1)(68)(68)
Tax withholding related to vesting of restricted share units
(1)(31)(31)
Dividends to shareholders
(167)(167)
Share-based compensation
28 28 
Balance at October 2, 2020258 $ $6,814 $(46)$(4,947)$1,821 

 Number of Ordinary SharesPar Value of SharesAdditional Paid-in CapitalAccumulated Other Comprehensive LossAccumulated DeficitTotal
Balance at June 28, 2019269 $ $6,545 $(34)$(4,349)$2,162 
Impact of adopting new lease standard(2)(2)
Net income200 200 
Other comprehensive loss(6)(6)
Issuance of ordinary shares under employee share plans4 39 39 
Repurchases of ordinary shares(9)(447)(447)
Tax withholding related to vesting of restricted share units(1)(37)(37)
Dividends to shareholders(165)(165)
Share-based compensation26 26 
Balance at October 4, 2019263 $ $6,610 $(40)$(4,800)$1,770 

See Notes to Condensed Consolidated Financial Statements.
8


Table of Contents
SEAGATE TECHNOLOGY PLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1.Basis of Presentation and Summary of Significant Accounting Policies
Organization
Seagate Technology plc (“STX”) and its subsidiaries (collectively, unless the context otherwise indicates, the “Company”) is a leading provider of data storage technology and solutions. Its principal products are hard disk drives, commonly referred to as disk drives, hard drives or HDDs. In addition to HDDs, the Company produces a broad range of data storage products including solid state drives (“SSDs”), solid state hybrid drives (“SSHDs”) and storage subsystems.
HDDs are devices that store digitally encoded data on rapidly rotating disks with magnetic surfaces. HDDs continue to be the primary medium of mass data storage due to their performance attributes, reliability, high quality and cost effectiveness. Complementing existing storage architectures, SSDs use integrated circuit assemblies as memory to store data, and most SSDs use NAND flash memory. In contrast to HDDs and SSDs, SSHDs combine the features of SSDs and HDDs in the same unit, containing a high-capacity HDD and a smaller SSD acting as a cache to improve performance of frequently accessed data.
The Company’s HDD products are designed for mass capacity storage and legacy markets. Mass capacity storage supports high capacity, low-cost per terabyte storage applications, including nearline, video and image applications and network-attached storage. Legacy markets include mission critical, desktop, notebook, consumer, digital video recorders and gaming applications. These markets were previously categorized as enterprise servers and storage systems, edge non-compute applications and edge compute applications. The Company’s HDD and SSD product portfolio includes Serial Advanced Technology Attachment, Serial Attached SCSI and Non-Volatile Memory Express based designs to support a wide variety of mass capacity and legacy applications.
The Company’s enterprise data solutions portfolio includes storage subsystems and mass capacity optimized private cloud storage solutions for enterprises and cloud and managed service providers. Engineered for modularity, mobility, mass capacity and performance, these solutions include the Company’s enterprise HDDs and SSDs, enabling customers to integrate powerful, scalable storage within legacy enterprise IT environments or build new on premises private storage clouds from the ground up in a secure, cost-effective manner.
Basis of Presentation and Consolidation
The Company’s unaudited condensed consolidated financial statements include the accounts of the Company and all its wholly-owned and majority-owned subsidiaries, after elimination of intercompany transactions and balances.
The preparation of financial statements in accordance with the United States (“U.S.”) generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the Company’s condensed consolidated financial statements and accompanying notes. These estimates and assumptions include the impact of the COVID-19 pandemic. Actual results could differ materially from those estimates. The methods, estimates and judgments the Company uses in applying its most critical accounting policies have a significant impact on the results the Company reports in its condensed consolidated financial statements.
The Company’s consolidated financial statements for the fiscal year ended July 3, 2020 are included in its Annual Report on Form 10-K, as filed with the U.S. Securities and Exchange Commission (“SEC”) on August 7, 2020. The Company believes that the disclosures included in these unaudited condensed consolidated financial statements, when read in conjunction with its consolidated financial statements as of July 3, 2020, and the notes thereto, are adequate to make the information presented not misleading.
Fiscal Year
The Company operates and reports financial results on a fiscal year of 52 or 53 weeks ending on the Friday closest to June 30. In fiscal years with 53 weeks, the first quarter consists of 14 weeks and the remaining quarters consist of 13 weeks each. The three months ended October 2, 2020 consisted of 13 weeks and the three months ended October 4, 2019 consisted of 14 weeks. Fiscal year 2021, which ends on July 2, 2021, is comprised of 52 weeks and fiscal year 2020, which ended on July 3, 2020, was comprised of 53 weeks. The fiscal quarters ended October 2, 2020, July 3, 2020 and October 4, 2019, are also referred to herein as the “September 2020 quarter”, the “June 2020 quarter” and the “September 2019 quarter”, respectively. The results of operations for the three months ended October 2, 2020 are not necessarily indicative of the results of operations to be expected for any subsequent interim period or for the Company’s fiscal year ending July 2, 2021.
9

Table of Contents
Summary of Significant Accounting Policies
There have been no material changes to the Company’s significant accounting policies disclosed in Note 1. Basis of Presentation and Summary of Significant Accounting Policies of “Financial Statements and Supplementary Data” contained in Part II, Item 8. of the Company’s Annual Report on Form 10-K for the fiscal year ended July 3, 2020, as filed with the SEC on August 7, 2020.
Recently Adopted Accounting Pronouncements
In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13 (ASC Topic 326), Financial Instruments—Credit Losses: Measurement of Credit Losses on Financial Instruments. This ASU amends the requirement on the measurement and recognition of expected credit losses for financial assets held to include future conditions in its estimate of expected credit losses. The Company adopted this new accounting pronouncement in the September 2020 quarter. The adoption of this ASU did not have a material impact on the Company’s condensed consolidated financial statements.
In August 2018, the FASB issued ASU 2018-15 (ASC Subtopic 350-40), Intangibles—Goodwill and Other - Internal-Use Software—Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract. This ASU aligns the accounting for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the accounting for implementation costs incurred to develop or obtain internal-use software. The Company adopted this new accounting pronouncement in the September 2020 quarter. The adoption of this ASU did not have a material impact on the Company’s condensed consolidated financial statements.
Recently Issued Accounting Pronouncements
In December 2019, the FASB issued ASU 2019-12 (ASC Topic 740), Simplifying the Accounting for Income Taxes. This ASU simplifies accounting for income taxes by removing certain exceptions to the general principles and amending existing guidance to improve consistent application. The Company is required to adopt this new accounting pronouncement in the first quarter of fiscal year 2022. Early adoption is permitted. The Company is in the process of assessing the impact of this ASU on its condensed consolidated financial statements.
In March 2020, the FASB issued ASU 2020-04 (ASC Topic 848), Reference Rate Reform. This ASU provides optional expedients and exceptions for applying U.S. generally accepted accounting principles to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met. Adoption of the expedients and exceptions is permitted upon issuance of this update through December 31, 2022. The Company is in the process of assessing the impact of this ASU on its condensed consolidated financial statements.
2.Balance Sheet Information
Available-for-sale Debt Securities
The following table summarizes, by major type, the fair value and amortized cost of the Company’s investments as of October 2, 2020:
(Dollars in millions)Amortized CostUnrealized Gain/(Loss)Fair Value
Available-for-sale debt securities:   
Money market funds$418 $ $418 
Time deposits and certificates of deposit62  62 
Other debt securities18  18 
Total$498 $ $498 
Included in Cash and cash equivalents  $475 
Included in Other current assets  5 
Included in Other assets, net18 
Total  $498 
 
10

Table of Contents
As of October 2, 2020, the Company’s Other current assets included $2 million in restricted cash and investments held as collateral at banks for various performance obligations.
As of October 2, 2020, the Company had no material available-for-sale debt securities that had been in a continuous unrealized loss position for a period greater than 12 months. The Company determined no impairment related to credit losses for available-for-sale debt securities as of October 2, 2020.
The fair value and amortized cost of the Company’s investments classified as available-for-sale debt securities as of October 2, 2020, by remaining contractual maturity were as follows:
(Dollars in millions)Amortized CostFair Value
Due in less than 1 year$480 $480 
Due in 1 to 5 years10 10 
Due in 6 to 10 years  
Thereafter8 8 
Total$498 $498 

The following table summarizes, by major type, the fair value and amortized cost of the Company’s investments as of July 3, 2020:
(Dollars in millions)Amortized CostUnrealized Gain/(Loss)Fair Value
Available-for-sale debt securities:   
Money market funds$495 $ $495 
Time deposits and certificates of deposit56  56 
Other debt securities18  18 
Total$569 $ $569 
Included in Cash and cash equivalents  $549 
Included in Other current assets  2 
Included in Other assets, net18 
Total  $569 

As of July 3, 2020, the Company’s Other current assets included $2 million in restricted cash and investments held as collateral at banks for various performance obligations.
As of July 3, 2020, the Company had no material available-for-sale debt securities that had been in a continuous unrealized loss position for a period greater than 12 months. The Company determined no available-for-sale debt securities were other-than-temporarily impaired as of July 3, 2020.
Cash, Cash Equivalents and Restricted Cash
The following table provides a summary of cash, cash equivalents and restricted cash reported within the Condensed Consolidated Balance Sheets that reconciles to the corresponding amount in the Condensed Consolidated Statements of Cash Flows:
(Dollars in millions)October 2,
2020
July 3,
2020
October 4,
2019
June 28,
2019
Cash and cash equivalents$1,664 $1,722 $1,784 $2,220 
Restricted cash included in Other current assets2 2 2 31 
Total cash, cash equivalents and restricted cash presented in the Statements of Cash Flows$1,666 $1,724 $1,786 $2,251 

11

Table of Contents
As of June 28, 2019, the Company’s Other current assets included $31 million in restricted cash and cash equivalents in an escrow account for the sale of certain properties and cash equivalents held as collateral at banks for various performance obligations.
Accounts Receivable, net
In connection with an existing factoring agreement, the Company sells trade receivables to a third party for cash proceeds less a discount. During the three months ended October 2, 2020, the Company sold trade receivables without recourse for cash proceeds of $148 million, all of which remained subject to servicing by the Company as of October 2, 2020. The discounts on receivables sold were not material for the three months ended October 2, 2020.
Inventories
The following table provides details of the inventory balance sheet item:
(Dollars in millions)October 2,
2020
July 3,
2020
Raw materials and components$536 $451 
Work-in-process365 313 
Finished goods422 378 
Total inventories$1,323 $1,142 
Property, Equipment and Leasehold Improvements, net
The components of property, equipment and leasehold improvements, net, were as follows:
(Dollars in millions)October 2,
2020
July 3,
2020
Property, equipment and leasehold improvements$10,280 $10,212 
Accumulated depreciation and amortization(8,113)(8,083)
Property, equipment and leasehold improvements, net$2,167 $2,129 
 
Accrued Expenses
The following table provides details of the accrued expenses balance sheet item:
(Dollars in millions)October 2,
2020
July 3,
2020
Dividends payable$167 $167 
Other accrued expenses436 435 
Total$603 $602 
12

Table of Contents
Accumulated Other Comprehensive Loss (“AOCL”)
The components of AOCL, net of tax, were as follows:
(Dollars in millions)Unrealized Gains/(Losses) on Cash Flow HedgesUnrealized Gains/(Losses) on Post-Retirement PlansForeign Currency Translation AdjustmentsTotal
Balance at July 3, 2020$(24)$(26)$(16)$(66)
Other comprehensive income before reclassifications 4   4 
Amounts reclassified from AOCL 1 15 16 
Other comprehensive income4 1 15 20 
Balance at October 2, 2020$(20)$(25)$(1)$(46)
Balance at June 28, 2019$ $(20)$(14)$(34)
Other comprehensive loss before reclassifications
(1) (5)(6)
Amounts reclassified from AOCL    
Other comprehensive loss(1) (5)(6)
Balance at October 4, 2019$(1)$(20)$(19)$(40)

3.Debt
Credit Agreement
The Company’s subsidiary, Seagate HDD Cayman, entered into a credit agreement (the “Credit Agreement”) on February 20, 2019, which was most recently amended on September 16, 2019. The Credit Agreement provides an up to $1.5 billion senior unsecured revolving credit facility (“Revolving Credit Facility”) and a term loan facility in an aggregate principal amount of $500 million (“Term Loan”). The Revolving Credit Facility has a final maturity of February 20, 2024 and the Term Loan has a final maturity date of September 16, 2025. The loans made under the Revolving Credit Facility and the Term Loan will bear interest at a rate of the London Interbank Offered Rate (“LIBOR”) plus a variable margin for each facility that will be determined based on the corporate credit rating of the Company. STX and certain of its material subsidiaries fully and unconditionally guarantee both the Revolving Credit Facility and the Term Loan. The Revolving Credit Facility also allows such facility to increase by an additional $100 million, provided that (i) there has been, and will be after giving effect to such increase, no default, (ii) the increase is at least $25 million, and (iii) the existing commitments under such facility receive 0.50% most favored nation protection. An aggregate amount of up to $75 million of the Revolving Credit Facility is available for the issuance of letters of credit, and an aggregate amount of up to $50 million of such facility is also available for swing line loans.
On September 17, 2019, Seagate HDD Cayman borrowed the $500 million principal amount under the Term Loan and the proceeds were used to repurchase a portion of its outstanding senior notes. The Term Loan is repayable in quarterly installments of 1.25% of the original principal amount beginning on December 31, 2020, with the remaining balance payable upon maturity.
The Credit Agreement includes three financial covenants: (1) interest coverage ratio, (2) total leverage ratio, and (3) a minimum liquidity amount. The Company was in compliance with the covenants as of October 2, 2020 and expects to be in compliance for the next 12 months.
As of October 2, 2020, no borrowings were drawn and no letters of credit or swing line loans had been utilized under the Revolving Credit Facility.
13

Table of Contents
Other Long-Term Debt
$750 million Aggregate Principal Amount of 4.25% Senior Notes due March, 2022 (the “2022 Notes”). The interest on the 2022 Notes is payable semi-annually on March 1 and September 1 of each year. The issuer under the 2022 Notes is Seagate HDD Cayman, and the obligations under the 2022 Notes are fully and unconditionally guaranteed, on a senior unsecured basis, by STX. During the three months ended October 2, 2020, $9 million aggregate principal amount of the 2022 Notes were repurchased for cash at a premium to their principal amount, plus accrued and unpaid interest. During the three months ended October 4, 2019, $250 million aggregate principal amount was repurchased pursuant to cash tender offers for certain senior notes (“the Tender Offers”). The Company recorded an immaterial loss and a loss of $10 million, respectively, on repurchases during the three months ended October 2, 2020 and October 4, 2019, which is included in Other, net in the Company’s Condensed Consolidated Statements of Operations.
$1 billion Aggregate Principal Amount of 4.75% Senior Notes due June, 2023 (the “2023 Notes”). The interest on the 2023 Notes is payable semi-annually on June 1 and December 1 of each year. The issuer under the 2023 Notes is Seagate HDD Cayman, and the obligations under the 2023 Notes are fully and unconditionally guaranteed, on a senior unsecured basis, by STX. During the three months ended October 2, 2020, $5 million aggregate principal amount of the 2023 Notes were repurchased for cash at a premium to their principal amount, plus accrued and unpaid interest, of which $2 million remained unsettled as of October 2, 2020. During the three months ended October 4, 2019, $200 million aggregate principal amount was repurchased pursuant to the Tender Offers. The Company recorded a loss of $1 million and $10 million, respectively, on repurchases during the three months ended October 2, 2020 and October 4, 2019, which is included in Other, net in the Company’s Condensed Consolidated Statements of Operations.
$500 million Aggregate Principal Amount of 4.875% Senior Notes due March, 2024 (the “2024 Notes”). The interest on the 2024 Notes is payable semi-annually on March 1 and September 1 of each year. The issuer under the 2024 Notes is Seagate HDD Cayman, and the obligations under the 2024 Notes are fully and unconditionally guaranteed, on a senior unsecured basis, by STX.
$1 billion Aggregate Principal Amount of 4.75% Senior Notes due January, 2025 (the “2025 Notes”). The interest on the 2025 Notes is payable semi-annually on January 1 and July 1 of each year. The issuer under the 2025 Notes is Seagate HDD Cayman, and the obligations under the 2025 Notes are fully and unconditionally guaranteed, on a senior unsecured basis, by STX. During the three months ended October 4, 2019, $170 million aggregate principal amount was repurchased pursuant to the Tender Offers. The Company recorded a loss of $8 million on repurchases during the three months ended October 4, 2019, which is included in Other, net in the Company’s Condensed Consolidated Statements of Operations.
$700 million Aggregate Principal Amount of 4.875% Senior Notes due June, 2027 (the “2027 Notes”). The interest on the Notes is payable semi-annually on June 1 and December 1 of each year. The issuer under the 2027 Notes is Seagate HDD Cayman, and the obligations under the 2027 Notes are fully and unconditionally guaranteed, on a senior unsecured basis, by STX.
$500 million Aggregate Principal Amount of 4.091% Senior Notes due June, 2029 (the “2029 Notes”). The interest on the Notes is payable semi-annually on June 1 and December 1 of each year. The issuer under the 2029 Notes is Seagate HDD Cayman, and the obligations under the 2029 Notes are fully and unconditionally guaranteed, on a senior unsecured basis, by STX.
$500 million Aggregate Principal Amount of 4.125% Senior Notes due January, 2031 (the “2031 Notes”). The interest on the Notes is payable semi-annually on January 15 and July 15 of each year. The issuer under the 2031 Notes is Seagate HDD Cayman, and the obligations under the 2031 Notes are fully and unconditionally guaranteed, on a senior unsecured basis, by STX.
$500 million Aggregate Principal Amount of 5.75% Senior Notes due December, 2034 (the “2034 Notes”). The interest on the 2034 Notes is payable semi-annually on June 1 and December 1 of each year. The issuer under the 2034 Notes is Seagate HDD Cayman, and the obligations under the 2034 Notes are fully and unconditionally guaranteed, on a senior unsecured basis, by STX.
14

Table of Contents
At October 2, 2020, future principal payments on long-term debt were as follows (in millions):
Fiscal YearAmount
Remainder of 2021$19 
2022245 
2023566 
2024525 
2025504 
Thereafter2,376 
Total$4,235 

4.Income Taxes
The Company’s income tax benefit of $2 million for the three months ended October 2, 2020 included approximately $10 million of net discrete tax benefit of which $4 million was associated with net excess tax benefits related to share-based compensation expense and $3 million was associated with the postponement of the previously enacted United Kingdom (“U.K.”) tax rate change in the September 2020 quarter.
The Company’s income tax provision recorded for the three months ended October 2, 2020 differed from the provision for income taxes that would be derived by applying the Irish statutory rate of 25% to income before income taxes, primarily due to the net effect of tax benefits related to (i) non-Irish earnings generated in jurisdictions that are subject to tax incentive programs and are considered indefinitely reinvested outside of Ireland and (ii) current year generation of research credits.
During the three months ended October 2, 2020, the Company had approximately $89 million of unrecognized tax benefits excluding interest and penalties, substantially all of which would impact the effective tax rate, if recognized, subject to certain future valuation allowance reversals. During the twelve months beginning October 3, 2020, the Company expects that its unrecognized tax benefits could be reduced by an immaterial amount, as a result of the expiration of certain statutes of limitation.
The Company’s income tax benefit of $2 million for the three months ended October 4, 2019 included approximately $11 million of net discrete tax benefit of which $8 million was associated with net excess tax benefits related to share-based compensation expense.
The Company’s income tax provision recorded for the three months ended October 4, 2019 differed from the provision for income taxes that would be derived by applying the Irish statutory rate of 25% to income before income taxes, primarily due to the net effect of tax benefits related to (i) non-Irish earnings generated in jurisdictions that are subject to tax incentive programs and are considered indefinitely reinvested outside of Ireland and (ii) current year generation of research credits.
5.Leases
The Company is a lessee in several operating leases related to real estate facilities for warehouse and office space.
The Company’s lease arrangements comprise operating leases with various expiration dates through 2082. The lease term includes the non-cancelable period of the lease, adjusted for options to extend or terminate the lease when it is reasonably certain that an option will be exercised.
Operating lease costs include short-term lease costs and are shown net of immaterial sublease income. The components of lease costs and other information related to leases were as follows:
For the Three Months Ended
(Dollars in millions)October 2,
2020
October 4,
2019
Operating lease cost$3 $6 
Variable lease cost1 1 
Total lease cost$4 $7 
Operating cash outflows from operating leases$4 $4 

15

Table of Contents
October 2,
2020
July 3,
2020
Weighted-average remaining lease term13.1 years13.2 years
Weighted-average discount rate6.46 %6.53 %

Right-of-use (“ROU”) assets and lease liabilities are included on the Company’s Condensed Consolidated Balance Sheet as follows:
(Dollars in millions)Balance Sheet LocationOctober 2,
2020
July 3,
2020
ROU assetsOther assets, net$103 $103 
Current lease liabilitiesAccrued expenses$16 $14 
Non-current lease liabilitiesOther non-current liabilities$49 $49 

At October 2, 2020, future lease payments included in the measurement of lease liabilities were as follows (in millions):
Fiscal YearAmount
Remainder of 2021$12 
202215 
202310 
20246 
20254 
Thereafter103 
Total lease payments150 
Less: imputed interest(85)
Present value of lease liabilities$65 

6.Restructuring and Exit Costs
The Company recorded restructuring charges of $1 million for the three months ended October 2, 2020, and $17 million for the three months ended October 4, 2019. The Company’s restructuring plans are comprised primarily of charges related to workforce reduction costs and facilities and other exit costs. All restructuring charges are reported in Restructuring and other, net on the Company’s Condensed Consolidated Statements of Operations.
June 2020 Plan - On June 1, 2020, the Company committed to a restructuring plan (the “June 2020 Plan”) consistent with its long-term strategy to drive operational efficiencies, reduce its cost structure and invest in future opportunities. The June 2020 Plan included consolidating the Company’s Minnesota facilities into one location and reducing its headcount worldwide by approximately 500 employees. The June 2020 Plan was substantially completed during the September 2020 quarter.
The following tables summarize the Company’s restructuring activities under all of the Company’s restructuring plans:
June 2020 PlanOther Plans
(Dollars in millions)Workforce Reduction CostsFacilities and Other Exit CostsWorkforce Reduction CostsFacilities and Other Exit CostsTotal
Accrual balances at July 3, 2020$38 $2 $5 $3 $48 
Restructuring charges  1  1 
Cash payments(35)(1)(3) (39)
Adjustments     
Accrual balances at October 2, 2020
$3 $1 $3 $3 $10 
Total costs incurred to date as of October 2, 2020
$56 $2 $17 $28 $103 
Total expected charges to be incurred as of October 2, 2020
$ $7 $ $ $7 

16

Table of Contents
Restructuring Plans
(Dollars in millions)Workforce Reduction CostsFacilities and Other Exit CostsTotal
Accrual balances at June 28, 2019
$13 $17 $30 
Lease adoption adjustment (11)(11)
Restructuring charges17  17 
Cash payments(13)(1)(14)
Adjustments   
Accrual balances at October 4, 2019
$17 $5 $22 

7.Derivative Financial Instruments
The Company is exposed to foreign currency exchange rate, interest rate, and to a lesser extent, equity market risks relating to its ongoing business operations. From time to time, the Company enters into cash flow hedges in the form of foreign currency forward exchange contracts in order to manage the foreign currency exchange rate risk on forecasted expenses and investments denominated in foreign currencies.
In the quarter ended October 4, 2019, the Company entered into certain interest rate swap agreements with a notional amount of $500 million to convert the variable interest rate on its Term Loan to fixed interest rates. The contracts will mature on September 16, 2025. The objective of the interest rate swap agreements is to eliminate the variability of interest payment cash flows associated with the variable interest rate under the Term Loan. The Company designated the interest rate swaps as cash flow hedges.
The Company’s accounting policies for these instruments are based on whether the instruments are classified as designated or non-designated hedging instruments. The Company records all derivatives on its Condensed Consolidated Balance Sheets at fair value. The changes in the fair value of highly effective designated cash flow hedges are recorded in Accumulated other comprehensive loss until the hedged item is recognized in earnings. Derivatives that are not designated as hedging instruments or are not assessed to be highly effective are adjusted to fair value through earnings. The amount of net unrealized loss on cash flow hedges was $21 million and $24 million as of October 2, 2020 and as of July 3, 2020, respectively. As of October 2, 2020, the amount of existing net losses related to cash flow hedges recorded in Accumulated other comprehensive loss included $2 million that is expected to be reclassified to earnings within twelve months.
The Company de-designates its cash flow hedges when the forecasted hedged transactions affect earnings or it is probable the forecasted hedged transactions will not occur in the initially identified time period. At such time, the associated gains and losses deferred in Accumulated other comprehensive loss on the Company’s Condensed Consolidated Balance Sheets are reclassified into earnings and any subsequent changes in the fair value of such derivative instruments are immediately reflected in earnings. The Company did not recognize any material amounts related to the loss of hedge designation on discontinued cash flow hedges during the three months ended October 2, 2020 and October 4, 2019.
Other derivatives not designated as hedging instruments consist of foreign currency forward exchange contracts that the Company uses to hedge the foreign currency exposure on forecasted expenditures denominated in currencies other than the U.S. dollar. The Company recognizes gains and losses on these contracts, as well as the related costs in Other, net on its Condensed Consolidated Statements of Operations.
The following tables show the total notional value of the Company’s outstanding foreign currency forward exchange contracts as of October 2, 2020 and July 3, 2020. All of the foreign currency forward exchange contracts mature within 12 months.
 As of October 2, 2020
(Dollars in millions)Contracts Designated as HedgesContracts Not Designated as Hedges
Singapore Dollar$175 $48 
Thai Baht130 41 
Chinese Renminbi66 23 
British Pound Sterling58 17 
$429 $129 

17

Table of Contents
 As of July 3, 2020
(Dollars in millions)Contracts Designated as HedgesContracts Not Designated as Hedges
Singapore Dollar$187 $56 
Thai Baht157 42 
Chinese Renminbi81 25 
British Pound Sterling64 20 
$489 $143 

The Company is subject to equity market risks due to changes in the fair value of the notional investments selected by its employees as part of its non-qualified deferred compensation plan: the Seagate Deferred Compensation Plan (the “SDCP”). In fiscal year 2014, the Company entered into a Total Return Swap (“TRS”) in order to manage the equity market risks associated with the SDCP’s liabilities. The Company pays a floating rate, based on LIBOR plus an interest rate spread, on the notional amount of the TRS. The TRS is designed to substantially offset changes in the SDCP’s liabilities due to changes in the value of the investment options made by employees. As of October 2, 2020, the notional investments underlying the TRS amounted to $110 million. The contract term of the TRS is through January 2021 and is settled on a monthly basis, therefore limiting counterparty performance risk. The Company did not designate the TRS as a hedge. Rather, the Company records all changes in the fair value of the TRS to earnings to offset the market value changes of the SDCP’s liabilities.
The following tables show the Company’s derivative instruments measured at gross fair value as reflected in the Condensed Consolidated Balance Sheets as of October 2, 2020 and July 3, 2020:
As of October 2, 2020
 Derivative AssetsDerivative Liabilities
(Dollars in millions)Balance Sheet LocationFair ValueBalance Sheet LocationFair Value
Derivatives designated as hedging instruments:    
Foreign currency forward exchange contractsOther current assets$7 Accrued expenses$(1)
Interest rate swapOther current assets Accrued expenses(27)
Derivatives not designated as hedging instruments:  
Foreign currency forward exchange contractsOther current assets2 Accrued expenses 
Total return swapOther current assets1 Accrued expenses(2)
Total derivatives $10  $(30)

As of July 3, 2020
 Derivative AssetsDerivative Liabilities
(Dollars in millions)Balance Sheet LocationFair ValueBalance Sheet LocationFair Value
Derivatives designated as hedging instruments:    
Foreign currency forward exchange contractsOther current assets$3 Accrued expenses$ 
Interest rate swapOther current assets Accrued expenses(27)
Derivatives not designated as hedging instruments:  
Foreign currency forward exchange contractsOther current assets2 Accrued expenses(2)
Total return swapOther current assets1 Accrued expenses 
Total derivatives $6  $(29)

18

Table of Contents
The following tables show the effect of the Company’s derivative instruments on the Condensed Consolidated Statements of Comprehensive Income and the Condensed Consolidated Statements of Operations for the three months ended October 2, 2020:    
(Dollars in millions)
Derivatives Not Designated as Hedging Instruments
Location of Gain/(Loss) Recognized in Income on DerivativesAmount of Gain/(Loss) Recognized in Income on Derivatives
Foreign currency forward exchange contractsOther, net$6 
Total return swapOperating expenses5 



(Dollars in millions)
Derivatives Designated as Hedging Instruments
Amount of Gain/(Loss) Recognized in OCI on Derivatives (Effective Portion)Location of Gain/(Loss) Reclassified from Accumulated OCI into Income (Effective Portion)Amount of Gain/(Loss) Reclassified from Accumulated OCI into Income (Effective Portion)Location of Gain/(Loss) Recognized in Income on Derivatives (Ineffective Portion and Amount Excluded from Effectiveness Testing)Amount of Gain/(Loss) Recognized in Income (Ineffective Portion and Amount Excluded from Effectiveness Testing)
Foreign currency forward exchange contracts$4 Other expense, net$2 Other expense, net$ 
Interest rate swap Other expense, net(2)Other expense, net 


The following table shows the effect of the Company’s derivative instruments on the Condensed Consolidated Statements of Comprehensive Income and the Condensed Consolidated Statements of Operations for the three months ended October 4, 2019:
(Dollars in millions)
Derivatives Not Designated as Hedging Instruments
Location of Gain/(Loss) Recognized in Income on DerivativesAmount of Gain/(Loss) Recognized in Income on Derivatives
Foreign currency forward exchange contractsOther, net$3 

The amount of loss recognized in the Condensed Consolidated Statements of Comprehensive Income on derivatives designated as cash flow hedges was $1 million for the three months ended October 4,