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Document and Entity Information - shares	6 Months Ended
Document and Entity Information - shares	Jan. 01, 2016	Feb. 08, 2016
Document Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jan. 01, 2016
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q2
Trading Symbol	WDC
Entity Registrant Name	WESTERN DIGITAL CORP
Entity Central Index Key	0000106040
Current Fiscal Year End Date	--07-01
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		232,770,151

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions	Jan. 01, 2016	Jul. 03, 2015
Current assets:
Cash and cash equivalents	$ 5,363	$ 5,024
Short-term investments	497	262
Accounts receivable, net	1,650	1,532
Inventories	1,238	1,368
Other current assets	200	331
Total current assets	8,948	8,517
Property, plant and equipment, net	2,801	2,965
Goodwill	2,766	2,766
Other intangible assets, net	292	332
Other non-current assets	659	601
Total assets	15,466	15,181
Current liabilities:
Accounts payable	1,806	1,881
Accrued expenses	505	470
Accrued compensation	315	330
Accrued warranty	144	150
Accrued arbitration award	32	0
Revolving Credit Facility	255	255
Current portion of long-term debt	188	156
Total current liabilities	3,245	3,242
Long-term debt	2,062	2,156
Other liabilities	602	564
Total liabilities	5,909	5,962
Commitments and contingencies (Notes 4 and 5)
Shareholders' equity:
Preferred stock, $.01 par value; authorized — 5 shares; issued and outstanding — none	0	0
Common stock, $.01 par value; authorized — 450 shares; issued — 261 shares; outstanding — 232 and 230 shares, respectively	3	3
Additional paid-in capital	2,421	2,428
Accumulated other comprehensive income (loss)	(8)	(20)
Retained earnings	9,407	9,107
Treasury stock — common shares at cost; 29 and 31 shares, respectively	(2,266)	(2,299)
Total shareholders' equity	9,557	9,219
Total liabilities and shareholders' equity	$ 15,466	$ 15,181

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Jan. 01, 2016	Jul. 03, 2015
Statement of Financial Position [Abstract]
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock, authorized	5,000,000	5,000,000
Preferred stock, issued	0	0
Preferred stock, outstanding	0	0
Common stock, par value	$ 0.01	$ 0.01
Common stock, authorized	450,000,000	450,000,000
Common stock, issued	261,000,000	261,000,000
Common stock, outstanding	232,000,000	230,000,000
Treasury stock, shares	29,000,000	31,000,000

CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Millions, $ in Millions	3 Months Ended		6 Months Ended
	Jan. 01, 2016	Jan. 02, 2015	Jan. 01, 2016	Jan. 02, 2015
Income Statement [Abstract]
Revenue, net	$ 3,317	$ 3,888	$ 6,677	$ 7,831
Cost of revenue	2,411	2,778	4,816	5,572
Gross margin	906	1,110	1,861	2,259
Operating expenses:
Research and development	389	426	774	863
Selling, general and administrative	207	164	399	384
Charges related to arbitration award	32	1	32	15
Employee termination, asset impairment and other charges	27	53	83	62
Total operating expenses	655	644	1,288	1,324
Operating income	251	466	573	935
Other income (expense):
Interest and other income	6	4	11	8
Interest and other expense	(13)	(12)	(26)	(25)
Total other expense, net	(7)	(8)	(15)	(17)
Income before income taxes	244	458	558	918
Income tax provision	(7)	20	24	57
Net income	$ 251	$ 438	$ 534	$ 861
Income per common share:
Basic	$ 1.08	$ 1.88	$ 2.31	$ 3.70
Diluted	$ 1.07	$ 1.84	$ 2.28	$ 3.60
Weighted average shares outstanding:
Basic	232	233	231	233
Diluted	234	238	234	239
Cash Dividend Per Common Share Declared	$ 0.50	$ 0.40	$ 1.00	$ 0.80

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jan. 01, 2016	Jan. 02, 2015	Jan. 01, 2016	Jan. 02, 2015
Statement of Comprehensive Income [Abstract]
Net income	$ 251	$ 438	$ 534	$ 861
Other comprehensive income (loss), net of tax:
Net unrealized gains (losses) on cash flow hedges	38	(18)	13	(44)
Net unrealized gains (losses) on available for sales securities	(2)	0	(1)	0
Other comprehensive income (loss)	36	(18)	12	(44)
Total comprehensive income	$ 287	$ 420	$ 546	$ 817

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References + Details

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions	6 Months Ended
	Jan. 01, 2016	Jan. 02, 2015
Cash flows from operating activities
Net income	$ 534	$ 861
Adjustments to reconcile net income to net cash provided by operations:
Depreciation and amortization	488	579
Stock-based Compensation	79	80
Deferred income taxes	15	31
Gain from insurance recovery	0	(37)
Loss on disposal of assets	6	12
Non-cash portion of employee termination benefits, asset impairment and other charges	18	19
Changes in:
Accounts receivable, net	(118)	109
Inventories	127	(56)
Accounts payable	(58)	94
Accrued arbitration award	32	(758)
Accrued expenses	35	70
Accrued compensation	(15)	(9)
Other assets and liabilities	0	75
Net cash provided by operating activities	1,143	1,070
Cash flows from investing activities
Purchases of property, plant and equipment	(300)	(306)
Proceeds from Sale of Property, Plant, and Equipment	0	7
Proceeds from Sale and Maturity of Other Investments	266	630
Purchases of investments	(408)	(595)
Acquisitions, net of cash acquired	0	(6)
Proceeds from (Payments for) Other Investing Activities	(12)	16
Net cash used in investing activities	(454)	(254)
Cash flows from financing activities
Issuance of stock under employee stock plans	54	112
Taxes paid on vested stock awards under employee stock plans	(44)	(59)
Excess tax benefits from employee stock plans	(6)	11
Repurchases of common stock	(60)	(532)
Dividends to shareholders	(231)	(187)
Repayment of debt	(63)	(63)
Net cash provided by (used in) financing activities	(350)	(718)
Net increase (decrease) in cash and cash equivalents	339	98
Cash and cash equivalents, beginning of period	5,024	4,804
Cash and cash equivalents, end of period	5,363	4,902
Supplemental disclosure of cash flow information:
Cash paid (received) for income taxes	21	(45)
Cash paid for interest	22	23
Supplemental disclosure of non-cash financing activities:
Accrual of cash dividend declared	$ 116	$ 93

Basis of Presentation	6 Months Ended
Basis of Presentation	Jan. 01, 2016
Accounting Policies [Abstract]
Basis of Presentation	1. Basis of Presentation The accounting policies followed by Western Digital Corporation (the “Company”) are set forth in Part II, Item 8, Note 1 of the Notes to Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended July 3, 2015. In the opinion of management, all adjustments necessary to fairly state the unaudited condensed consolidated financial statements have been made. All such adjustments are of a normal, recurring nature. Certain information and footnote disclosures normally included in the consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended July 3, 2015. The results of operations for interim periods are not necessarily indicative of results to be expected for the full year. The Company's fiscal year ends on the Friday nearest to June 30 and typically consists of 52 weeks. Approximately every six years, the Company reports a 53-week fiscal year to align its fiscal year with the foregoing policy. The Company's fiscal second quarters ended January 1, 2016 and January 2, 2015 both consisted of 13 weeks. The six months ended January 1, 2016 and January 2, 2015 consisted of 26 and 27 weeks, respectively. Fiscal 2016 will be comprised of 52 weeks and will end on July 1, 2016. Fiscal year 2015 was comprised of 53 weeks and ended on July 3, 2015. Company management has made estimates and assumptions relating to the reporting of certain assets and liabilities in conformity with U.S. GAAP. These estimates and assumptions have been applied using methodologies that are consistent throughout the periods presented. However, actual results could differ materially from these estimates.

Supplemental Financial Statement Data

6 Months Ended

Jan. 01, 2016

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Supplemental Financial Statement Data

2. Supplemental Financial Statement Data

Accounts Receivable

From time to time, in connection with a factoring agreement, the Company sells trade accounts receivable without recourse to a third party purchaser in exchange for cash. The Company did not sell trade accounts receivable during the three months ended January 1, 2016. During the six months ended January 1, 2016, the Company sold trade accounts receivable and received cash proceeds of $200 million. The Company did not sell trade accounts receivable during the three and six months ended January 2, 2015. The discounts on the sales of trade accounts receivable were not material and were recorded within interest and other expense in the condensed consolidated statements of income.

Inventories; Property, Plant and Equipment; and Other Intangible Assets



	January 1, 2016			July 3, 2015
	(in millions)
Inventories:
Raw materials and component parts	$	130		$	168
Work-in-process	474			500
Finished goods	634			700
Total inventories	$	1,238		$	1,368
Property, plant and equipment:
Property, plant and equipment	$	8,716		$	8,604
Accumulated depreciation	(5,915		)	(5,639		)
Property, plant and equipment, net	$	2,801		$	2,965
Other intangible assets:
Other intangible assets	$	1,018		$	1,008
Accumulated amortization	(726		)	(676		)
Other intangible assets, net	$	292		$	332

Warranty

The Company records an accrual for estimated warranty costs when revenue is recognized. The Company generally warrants its products for a period of one to five years. The warranty provision considers estimated product failure rates and trends, estimated replacement costs, estimated repair costs which include scrap costs, and estimated costs for customer compensatory claims related to product quality issues, if any. A statistical warranty tracking model is used to help prepare estimates and assist the Company in exercising judgment in determining the underlying estimates. The statistical tracking model captures specific detail on product reliability, such as factory test data, historical field return rates, and costs to repair by product type. Management’s judgment is subject to a greater degree of subjectivity with respect to newly introduced products because of limited field experience with those products upon which to base warranty estimates. Management reviews the warranty accrual quarterly for products shipped in prior periods and which are still under warranty. Any changes in the estimates underlying the accrual may result in adjustments that impact current period gross profit and income. Such changes are generally a result of differences between forecasted and actual return rate experience and costs to repair. If actual product return trends, costs to repair returned products or costs of customer compensatory claims differ significantly from estimates, future results of operations could be materially affected. Changes in the warranty accrual were as follows (in millions):



	Three Months Ended						Six Months Ended
	January 1, 2016			January 2, 2015			January 1, 2016			January 2, 2015
Warranty accrual, beginning of period	$	218		$	201		$	221		$	182
Charges to operations	43			50			88			99
Utilization	(40		)	(44		)	(94		)	(93		)
Changes in estimate related to pre-existing warranties	4			16			10			35
Warranty accrual, end of period	$	225		$	223		$	225		$	223

The long-term portion of the warranty accrual classified in other liabilities was $81 million as of January 1, 2016 and $71 million as of July 3, 2015.

Investments

The following tables summarize, by major type, the fair value and cost basis of the Company’s investments (in millions):



	January 1, 2016
	Cost Basis		Unrealized Losses			Fair Value
Available-for-sale securities:
U.S. Treasury securities	$	306	$	(1	)	$	305
U.S. Government agency securities	116		—			116
Commercial paper	50		—			50
Certificates of deposit	260		—			260
Total	$	732	$	(1	)	$	731



	July 3, 2015
	Cost Basis		Unrealized Gains (Losses)		Fair Value
Available-for-sale securities:
U.S. Treasury securities	$	287	$	—	$	287
U.S. Government agency securities	95		—		95
Commercial paper	109		—		109
Certificates of deposit	99		—		99
Total	$	590	$	—	$	590

The fair value of the Company’s investments classified as available-for-sale securities at January 1, 2016, by remaining contractual maturity, were as follows (in millions):



	Cost Basis		Fair Value
Due in less than one year (short-term investments):	$	497	$	497
Due in one to five years (included in other non-current assets):	235		234
Total	$	732	$	731

The Company determined no available-for-sale securities were other-than-temporarily impaired during the three and six months ended January 1, 2016 and January 2, 2015. For more information on the Company's available-for-sale securities, see Note 7 to these condensed consolidated financial statements.

From time to time, the Company enters into certain strategic investments for the promotion of business and strategic objectives. These strategic investments are recorded at cost within other non-current assets in the condensed consolidated balance sheets and were not material to the condensed consolidated financial statements as of January 1, 2016 and July 3, 2015.

Joint Venture

In November 2015, the Company entered into an agreement to form a joint venture with Unisplendour Corporation Limited ("Unis") to market and sell the Company's current data center storage systems in China and to develop data storage systems for the Chinese market in the future. The joint venture will be 51% owned by Unis and its subsidiary, Unissoft (Wuxi) Group Co. Ltd., and 49% by the Company.

Other Comprehensive Income (Loss), Net of Tax

Other comprehensive income (loss), net of tax refers to revenue, expenses, gains and losses that are recorded as an element of shareholders’ equity but are excluded from net income. The income tax impact on components of other comprehensive income is immaterial for all periods presented.

The following table illustrates the changes in the balances of each component of accumulated other comprehensive income (loss) for the six months ended January 1, 2016 (in millions):



	Actuarial Pension Gain		Unrealized Gain (Loss) on Foreign Exchange Contracts			Unrealized Loss on Available for Sale Securities			Accumulated Other Comprehensive Income (Loss)
Balance at July 3, 2015	$	5	$	(25	)	$	—		$	(20	)
Other comprehensive loss before reclassifications	—		(40		)	—			(40		)
Amounts reclassified from accumulated other comprehensive income (loss)	—		53			(1		)	52
Net current-period other comprehensive income (loss)	—		13			(1		)	12
Balance at January 1, 2016	$	5	$	(12	)	$	(1	)	$	(8	)

The following table illustrates the changes in the balances of each component of accumulated other comprehensive income (loss) for the six months ended January 2, 2015 (in millions):



	Actuarial Pension Gain		Unrealized Gain (Loss) on Foreign Exchange Contracts			Unrealized Gain (Loss) on Available for Sale Securities		Accumulated Other Comprehensive Income (Loss)
Balance at June 27, 2014	$	7	$	5		$	—	$	12
Other comprehensive loss before reclassifications	—		(57		)	—		(57		)
Amounts reclassified from accumulated other comprehensive income (loss)	—		13			—		13
Net current-period other comprehensive loss	—		(44		)	—		(44		)
Balance at January 2, 2015	$	7	$	(39	)	$	—	$	(32	)

Income per Common Share

6 Months Ended

Jan. 01, 2016

Earnings Per Share [Abstract]

Income per Common Share

3. Income per Common Share

The Company computes basic income per common share using net income and the weighted average number of common shares outstanding during the period. Diluted income per common share is computed using net income and the weighted average number of common shares and potentially dilutive common shares outstanding during the period. Potentially dilutive common shares include dilutive outstanding employee stock options, rights to purchase shares of common stock under the Company’s Employee Stock Purchase Plan (“ESPP”) and pursuant to awards of restricted stock units (“RSUs”).

The following table illustrates the computation of basic and diluted income per common share (in millions, except per share data):



	Three Months Ended				Six Months Ended
	January 1, 2016		January 2, 2015		January 1, 2016		January 2, 2015
Net income	$	251	$	438	$	534	$	861
Weighted average shares outstanding:
Basic	232		233		231		233
Employee stock options and other	2		5		3		6
Diluted	234		238		234		239
Income per common share:
Basic	$	1.08	$	1.88	$	2.31	$	3.70
Diluted	$	1.07	$	1.84	$	2.28	$	3.60
Anti-dilutive potential common shares excluded*	6		1		4		2



*	For purposes of computing diluted income per common share, certain potentially dilutive securities have been excluded from the calculation because their effect would have been anti-dilutive.

Debt	6 Months Ended
Debt	Jan. 01, 2016
Debt Disclosure [Abstract]
Debt	4. Debt The Company's credit agreement, which was entered into in January 2014 and subsequently amended (the "Credit Agreement"), provides for $4.0 billion of unsecured loan facilities consisting of a $2.5 billion term loan facility and a $1.5 billion revolving credit facility. The loans under the Credit Agreement have a five-year term. Subject to certain conditions, the credit facilities may be expanded by, or incremental term loans may be obtained for, up to $1.0 billion if existing or new lenders provide additional term or revolving commitments. The term loans and the revolving credit loans may be prepaid in whole or in part at any time without premium or penalty, subject to certain conditions. As of January 1, 2016, the revolving credit facility had a variable interest rate of 1.7% and an outstanding balance of $255 million. The revolving credit facility was classified within current liabilities as of January 1, 2016 as the Company intended to repay the borrowings within the next 12 months. The Company repaid the $255 million outstanding balance under the revolving credit facility on January 15, 2016. As of January 1, 2016, the term loan facility had a variable interest rate of 1.7% and a remaining outstanding balance of $2.3 billion. The Company is required to make quarterly principal payments on the term loan facility totaling $94 million for the remainder of fiscal 2016, $219 million in fiscal 2017, $250 million in fiscal 2018 and the remaining balance of $1.7 billion in fiscal 2019. The Credit Agreement requires the Company to comply with a leverage ratio and an interest coverage ratio calculated on a consolidated basis for the Company and its subsidiaries. In addition, the Credit Agreement contains customary covenants, including covenants that limit or restrict the Company’s and its subsidiaries’ ability to incur liens, incur indebtedness, make certain restricted payments, merge or consolidate and enter into certain speculative hedging arrangements, and customary events of default.

Legal Proceedings	6 Months Ended
Legal Proceedings	Jan. 01, 2016
Commitments and Contingencies Disclosure [Abstract]
Legal Proceedings	5. Legal Proceedings When the Company becomes aware of a claim or potential claim, the Company assesses the likelihood of any loss or exposure. The Company discloses information regarding each material claim where the likelihood of a loss contingency is probable or reasonably possible. If a loss contingency is probable and the amount of the loss can be reasonably estimated, the Company records an accrual for the loss. In such cases, there may be an exposure to potential loss in excess of the amount accrued. Where a loss is not probable but is reasonably possible or where a loss in excess of the amount accrued is reasonably possible, the Company discloses an estimate of the amount of the loss or range of possible losses for the claim if a reasonable estimate can be made, unless the amount of such reasonably possible losses is not material to the Company’s financial position, results of operations or cash flows. Unless otherwise stated below, for each of the matters described below, the Company has either recorded an accrual for losses that are probable and reasonably estimable or has determined that, while a loss is reasonably possible (including potential losses in excess of the amounts accrued by the Company), a reasonable estimate of the amount of loss or range of possible losses with respect to the claim or in excess of amounts already accrued by the Company cannot be made. The ability to predict the ultimate outcome of such matters involves judgments, estimates and inherent uncertainties. The actual outcome of such matters could differ materially from management’s estimates. Solely for purposes of this note, “WD” refers to Western Digital Corporation or one or more of its subsidiaries excluding HGST prior to the closing of the Company's acquisition of HGST on March 8, 2012 (the “HGST Closing Date”). HGST refers to Hitachi Global Storage Technologies Holdings Pte. Ltd. or one or more of its subsidiaries as of the HGST Closing Date, and “the Company” refers to Western Digital Corporation and all of its subsidiaries on a consolidated basis including HGST. Intellectual Property Litigation In June 2008, Convolve, Inc. (“Convolve”) filed a complaint in the Eastern District of Texas against WD, HGST, and two other companies alleging infringement of U.S. Patent Nos. 6,314,473 and 4,916,635. The complaint sought unspecified monetary damages and injunctive relief. In October 2008, Convolve amended its complaint to allege infringement of only the ‘473 patent. The ‘473 patent allegedly relates to interface technology to select between certain modes of a disk drive’s operations relating to speed and noise. In July 2011, a verdict was rendered against WD and HGST in an amount that is not material to the Company’s financial position, results of operations or cash flows, for which the Company previously recorded an accrual. In March 2015, WD and HGST filed Notices of Appeal with the United States District Court for the Federal Circuit (“Federal Circuit”). In April 2015, Convolve filed a motion for reconsideration of the final judgment, and in May 2015, the Federal Circuit deactivated the appeal pending the Court’s decision on reconsideration. WD and HGST intend to continue to defend themselves vigorously in this matter. Seagate Matter In October 2006, Seagate Technology LLC (“Seagate”) brought an action against the Company and a now former employee, alleging misappropriation of confidential information and trade secrets. In January 2012, an arbitrator issued a final award against the Company, including pre-award interest, of $630.4 million. The matter was appealed and, in October 2014, the Minnesota Supreme Court upheld the arbitrator’s award. In October 2014, the Company paid Seagate $773.4 million to satisfy the final arbitration award and interest accrued through October 2014. This amount was paid by one of the Company’s foreign subsidiaries using cash held outside of the United States. Seagate disputed the method the Company used for calculating post-award interest and contended that the Company owed Seagate approximately $29 million in additional interest. The Company denied Seagate’s contention. In April 2015, the District Court declared that all amounts due and owing from the Company to Seagate had been paid, and a corresponding judgment was entered. In May 2015, Seagate appealed the decision and judgment to the Minnesota Court of Appeals. On January 25, 2016, the Minnesota Court of Appeals reversed the District Court’s decision, determined that Seagate is owed additional post-award interest, and directed the District Court to enter judgment in accordance with its opinion. The Company has no automatic right to appeal and, on January 27, 2016, the Company paid the additional post-award interest, which was not material to the Company’s financial position, results of operations or cash flows. The additional post-award interest was paid by one of the Company’s foreign subsidiaries using cash held outside of the United States. The Company and Seagate have signed and filed with the court a stipulation of dismissal with prejudice resolving this matter. SanDisk Matters In November 2015, plaintiffs filed two putative class action complaints in the Superior Court of the State of California, County of Santa Clara, challenging the Agreement and Plan of Merger the Company entered into with SanDisk Corporation (“SanDisk”) on October 21, 2015 (the “Merger Agreement”). The complaints allege, among other things, that the members of the SanDisk board breached their fiduciary duties to SanDisk’s shareholders by agreeing to sell SanDisk for inadequate consideration, failing to properly value SanDisk, agreeing to inappropriate deal protection provisions that may inhibit other bidders from coming forward with a superior offer, not protecting against alleged conflicts of interest resulting from the SanDisk directors’ own interrelationships or connection with the proposed transaction, and failing to disclose all material information regarding the proposed transaction. The complaints also allege that the Company aided and abetted the SanDisk board members’ breaches of their fiduciary duties. The plaintiffs seek injunctive relief to prevent the merger from closing. The plaintiffs also seek, among other things, to recover costs and disbursement from the defendants, including attorneys’ fees and experts’ fees. The Company intends to defend itself vigorously in this matter. Other Matters In December 2011, the German Central Organization for Private Copying Rights (Zentralstelle für private Überspielungsrechte), (“ZPÜ”), an organization consisting of several copyright collecting societies, instituted arbitration proceedings against Western Digital's German subsidiary (“WD Germany”) before the Copyright Arbitration Board (“CAB”) claiming copyright levies for multimedia hard drives, external hard drives and network hard drives sold or introduced into commerce in Germany by WD Germany from January 2008 through December 2010. In February 2013, WD Germany filed a declaratory relief action against ZPÜ in the Higher Regional Court of Munich (the “Higher Court”), seeking an order from the court to determine the copyright levy issue. On May 21, 2013, ZPÜ filed a counter-claim against WD Germany with the Higher Court, seeking copyright levies for multimedia hard drives, external hard drives and network hard drives sold or introduced into commerce from January 2008 through December 2010 based on tariffs published by ZPÜ on November 3, 2011. In January 2015, the Higher Court ruled in favor of ZPÜ. In its ruling, the Higher Court declared that WD Germany must pay certain levies on certain WD products which it sold in Germany between January 2008 and December 2010. The judgment specifies levy amounts on certain WD products sold from January 2008 through December 2010 and directs WD Germany to provide applicable sales data to the ZPÜ. The exact amount of the judgment has not been determined. ZPÜ and WD Germany filed appeals with the German Federal Court of Justice in February 2015. WD intends to defend itself vigorously in this matter. In December 2014, ZPÜ submitted a pleading to the CAB seeking copyright levies for multimedia hard drives, external hard drives and network hard drives sold or introduced into commerce in Germany by WD Germany between January 2012 and December 2013. WD intends to defend itself vigorously in this matter. The Company has recorded an accrual for German copyright levies in an amount that is not material to the Company’s financial position, results of operations or cash flows. It is reasonably possible that the Company may incur losses totaling up to $109 million, including the amounts accrued. In the normal course of business, the Company is subject to other legal proceedings, lawsuits and other claims. Although the ultimate aggregate amount of probable monetary liability or financial impact with respect to these other matters is subject to many uncertainties, management believes that any monetary liability or financial impact to the Company from these other matters, individually and in the aggregate, would not be material to the Company’s financial condition, results of operations or cash flows. However, any monetary liability and financial impact to the Company from these other matters could differ materially from the Company's expectations.

Income Taxes	6 Months Ended
Income Taxes	Jan. 01, 2016
Income Tax Disclosure [Abstract]
Income Taxes	6. Income Taxes The Company had an income tax benefit of $7 million and income tax expense of $24 million in the three and six months ended January 1, 2016, respectively. The Company's income tax expense for the three and six months ended January 2, 2015 was $20 million and $57 million, respectively. The Company's tax provision for both the three and six months ended January 1, 2016 reflects a tax benefit of $30 million for the retroactive extension of the U.S. Federal research and development tax credit that was permanently signed into law on December 19, 2015 and a tax benefit of $34 million from restructuring activities. The remaining differences between the effective tax rate and the U.S. Federal statutory rate are primarily due to tax holidays in Malaysia, the Philippines, Singapore and Thailand that expire at various dates from 2016 through 2025 and the current year generation of income tax credits. In the three and six months ended January 1, 2016, the Company recorded a net increase of $15 million and $25 million, respectively, in its liability for unrecognized tax benefits. As of January 1, 2016, the Company's liability for unrecognized tax benefits was approximately $375 million. Interest and penalties recognized on such amounts were not material to the condensed consolidated financial statements during the three and six months ended January 1, 2016. The Internal Revenue Service (“IRS”) previously completed its field examination of the Company's federal income tax returns for fiscal years 2006 through 2009 and proposed certain adjustments. The Company has received Revenue Agent Reports (“RARs”) from the IRS that seek to increase the Company's U.S. taxable income which would result in additional federal tax expense totaling approximately $795 million, subject to interest. The issues in dispute relate primarily to transfer pricing with the Company’s foreign subsidiaries and intercompany payable balances. The Company disagrees with the proposed adjustments and in September 2015, filed a protest with the IRS Appeals Office. The Company believes that its tax positions are properly supported and will vigorously contest the position taken by the IRS. In September 2015, the IRS commenced an examination of the Company’s fiscal years 2010 through 2012. During the six months ended January 1, 2016, the IRS completed the examination of the fiscal period ended September 5, 2007 of Komag, Incorporated, which the Company acquired on September 5, 2007, with no material adjustments. The Company believes that adequate provision has been made for any adjustments that may result from tax examinations. However, the outcome of 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. As of January 1, 2016, it is not possible to estimate the amount of change, if any, in the unrecognized tax benefits that is reasonably possible within the next twelve months. Any significant change in the amount of the Company’s liability for unrecognized tax benefits would most likely result from additional information or settlements relating to the examination of the Company’s tax returns.

Fair Value Measurements

6 Months Ended

Jan. 01, 2016

Fair Value Disclosures [Abstract]

Fair Value Measurements

7. Fair Value Measurements

Financial assets and liabilities that are remeasured and reported at fair value at each reporting period are classified and disclosed in one of the following three levels:

Level 1. Quoted prices in active markets for identical assets or liabilities.

Level 2. Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3. Inputs that are unobservable for the asset or liability and that are significant to the fair value of the assets or liabilities.

The following tables present information about the Company’s financial assets and liabilities that are measured at fair value on a recurring basis as of January 1, 2016 and July 3, 2015, and indicate the fair value hierarchy of the valuation techniques utilized to determine such values (in millions):



	Fair Value Measurements at
	January 1, 2016
	Using
	Level 1		Level 2		Level 3		Total
Assets:
Cash equivalents:
Money market funds	$	392	$	—	$	—	$	392
Total cash equivalents	392		—		—		392
Short-term investments:
U.S. Treasury securities	—		121		—		121
U.S. Government agency securities	—		66		—		66
Commercial paper	—		50		—		50
Certificates of deposit	—		260		—		260
Total short-term investments	—		497		—		497
Long-term investments:
U.S. Treasury securities	—		184		—		184
U.S. Government agency securities	—		50		—		50
Total long-term investments	—		234		—		234
Foreign exchange contracts	—		3		—		3
Total assets at fair value	$	392	$	734	$	—	$	1,126
Liabilities:
Foreign exchange contracts	$	—	$	22	$	—	$	22
Total liabilities at fair value	$	—	$	22	$	—	$	22



	Fair Value Measurements at
	July 3, 2015
	Using
	Level 1		Level 2		Level 3		Total
Assets:
Cash equivalents:
Money market funds	$	135	$	—	$	—	$	135
Total cash equivalents	135		—		—		135
Short-term investments:
U.S. Treasury securities	—		50		—		50
U.S. Government agency securities	—		4		—		4
Commercial paper	—		109		—		109
Certificates of deposit	—		99		—		99
Total short-term investments	—		262		—		262
Long-term investments:
U.S. Treasury securities	—		237		—		237
U.S. Government agency securities	—		91		—		91
Total long-term investments	—		328		—		328
Total assets at fair value	$	135	$	590	$	—	$	725
Liabilities:
Foreign exchange contracts	$	—	$	31	$	—	$	31
Total liabilities at fair value	$	—	$	31	$	—	$	31

Money Market Funds. The Company’s money market funds are funds that invest in U.S. Treasury and U.S. Government Agency securities. Money market funds are valued based on quoted market prices.

U.S. Treasury Securities. The Company’s U.S. Treasury securities are direct obligations of the U.S. federal government and are held in custody by a third party. U.S. Treasury securities are valued using a market approach which is based on observable inputs including market interest rates from multiple pricing sources.

U.S. Government Agency Securities. The Company’s U.S. Government agency securities are investments in fixed income securities sponsored by the U.S. Government and are held in custody by a third party. U.S. Government agency securities are valued using a market approach which is based on observable inputs including market interest rates from multiple pricing sources.

Commercial Paper. The Company’s commercial paper securities are investments issued by corporations which are held in custody by a third party. Commercial paper securities are valued using a market approach which is based on observable inputs including market interest rates from multiple pricing sources.

Certificates of Deposit. The Company’s certificates of deposit are investments which are held in custody by a third party. Certificates of deposit are valued using fixed interest rates.

Foreign Exchange Contracts. The Company’s foreign exchange contracts are short-term contracts to hedge the Company’s foreign currency risk. For contracts that have a right of offset by its individual counterparties under master netting arrangements, the Company presents its foreign exchange contracts on a net basis by counterparty in the consolidated balance sheets. Foreign exchange contracts are valued using an income approach that is based on a present value of future cash flows model. The market-based observable inputs for the model include forward rates and credit default swap rates. For more information on the Company's foreign exchange contracts, see Note 8 to these condensed consolidated financial statements.

In the three and six months ended January 1, 2016, there were no transfers between levels. The carrying amounts of cash, accounts receivable, accounts payable and accrued expenses approximate fair value for all periods presented because of the short-term maturity of these assets and liabilities. The carrying amount of debt approximates fair value because of its variable interest rate.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Foreign Exchange Contracts

6 Months Ended

Jan. 01, 2016

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Foreign Exchange Contracts

8. Foreign Exchange Contracts

Although the majority of the Company’s transactions are in U.S. dollars, some transactions are based in various foreign currencies. The Company purchases short-term, foreign exchange contracts to hedge the impact of foreign currency exchange fluctuations on certain underlying assets, liabilities and commitments for operating expenses and product costs denominated in foreign currencies. The purpose of entering into these hedging transactions is to minimize the impact of foreign currency fluctuations on the Company’s results of operations. These contract maturity dates do not exceed 12 months. All foreign exchange contracts are for risk management purposes only. The Company does not purchase foreign exchange contracts for speculative or trading purposes. As of January 1, 2016, the Company had outstanding foreign exchange contracts with commercial banks for British Pound Sterling, Euro, Japanese Yen, Malaysian Ringgit, Philippine Peso, Singapore Dollar and Thai Baht, which were designated as either cash flow or fair value hedges.

If the derivative is designated as a cash flow hedge, the effective portion of the change in fair value of the derivative is initially deferred in other comprehensive income (loss), net of tax. These amounts are subsequently recognized into earnings when the underlying cash flow being hedged is recognized into earnings. Recognized gains and losses on foreign exchange contracts entered into for manufacturing-related activities are reported in cost of revenue and presented within cash flow from operations. Hedge effectiveness is measured by comparing the hedging instrument’s cumulative change in fair value from inception to maturity to the underlying exposure’s terminal value. The Company determined the ineffectiveness associated with its cash flow hedges to be immaterial to the condensed consolidated financial statements for the three and six months ended January 1, 2016 and January 2, 2015.

A change in the fair value of fair value hedges is recognized in earnings in the period incurred and is reported as a component of cost of revenue or operating expenses, depending on the nature of the underlying hedged item. All fair value hedges were determined to be effective as of January 1, 2016 and July 3, 2015. The changes in fair value on these contracts were immaterial to the condensed consolidated financial statements during the three and six months ended January 1, 2016 and January 2, 2015.

As of January 1, 2016, the net amount of unrealized losses with respect to the Company’s foreign exchange contracts that is expected to be reclassified into earnings within the next twelve months was $12 million. In addition, as of January 1, 2016, the Company did not have any foreign exchange contracts with credit-risk-related contingent features. The Company opened $992 million and $1.9 billion, and closed $1.1 billion and $2.1 billion, in foreign exchange contracts during the three and six months ended January 1, 2016, respectively. The Company opened $1.0 billion and $2.0 billion, and closed $1.1 billion and $2.1 billion, in foreign exchange contracts during the three and six months ended January 2, 2015, respectively. The fair value and balance sheet location of the Company's foreign exchange contracts as of January 1, 2016 and July 3, 2015 were as follows (in millions):

Asset Derivatives

Liability Derivatives

January 1, 2016

July 3, 2015

January 1, 2016

July 3, 2015

Derivatives Designated as

Hedging Instruments

Balance Sheet
Location

Fair
Value

Balance Sheet
Location

Fair
Value

Balance Sheet
Location

Fair
Value

Balance Sheet
Location

Fair
Value

Foreign exchange contracts

Other current assets

—

Accrued expenses

The following table presents the gross amounts of the Company's derivative instruments, amounts offset due to master netting arrangements with the Company's various counterparties, and the net amounts recognized in the condensed consolidated balance sheet as of January 1, 2016 (in millions):



Derivatives Designated as Hedging Instruments	Gross Amounts of Recognized Assets (Liabilities)			Gross Amounts Offset in the Balance Sheet			Net Amounts of Assets (Liabilities) Presented in the Balance Sheet
Foreign exchange contracts
Financial assets	$	5		$	(2	)	$	3
Financial liabilities	(24		)	2			(22		)
Total derivative instruments	$	(19	)	$	—		$	(19	)

The Company had a gross and net liability of $31 million related to its derivative instruments outstanding at July 3, 2015. There were no amounts offset due to master netting arrangements in place at July 3, 2015.

The impact of foreign exchange contracts on the condensed consolidated financial statements was as follows (in millions):



	Amount of Gain (Loss) Recognized in Accumulated OCI on Derivatives											Location of Gain (Loss) Reclassified from Accumulated OCI into Income	Amount of Loss Reclassified From Accumulated OCI into Income
Derivatives in Cash Flow Hedging Relationships	Three Months Ended		Six Months Ended			Three Months Ended			Six Months Ended				Three Months Ended		Six Months Ended		Three Months Ended		Six Months Ended
Derivatives in Cash Flow Hedging Relationships	January 1, 2016					January 2, 2015							January 1, 2016				January 2, 2015
Foreign exchange contracts	$	13	$	(40	)	$	(35	)	$	(57	)	Cost of revenue	$	25	$	53	$	17	$	13

The total net realized transaction and foreign exchange contract currency gains and losses were not material to the condensed consolidated financial statements during the three and six months ended January 1, 2016 and January 2, 2015.

- Definition

The entire disclosure for derivative instruments and hedging activities including, but not limited to, risk management strategies, non-hedging derivative instruments, assets, liabilities, revenue and expenses, and methodologies and assumptions used in determining the amounts.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
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+ Details

Shareholders' Equity

6 Months Ended

Jan. 01, 2016

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock-Based Compensation

9. Shareholders' Equity

Stock-Based Compensation Expense

The following table presents the Company's stock-based compensation and related tax benefit for the three and six months ended January 1, 2016 and January 2, 2015 (in millions):



	Three Months Ended								Six Months Ended
	January 1, 2016				January 2, 2015				January 1, 2016				January 2, 2015
	Expense		Tax Benefit		Expense		Tax Benefit		Expense		Tax Benefit		Expense		Tax Benefit
Options and ESPP	$	13	$	4	$	18	$	7	$	32	$	8	$	37	$	12
RSUs	24		6		23		6		47		12		43		11
Total	$	37	$	10	$	41	$	13	$	79	$	20	$	80	$	23

As of January 1, 2016, total compensation cost related to unvested stock options and ESPP rights issued to employees but not yet recognized was $118 million and will be amortized on a straight-line basis over a weighted average service period of approximately 2.4 years.

For purposes of this footnote, references to RSUs include performance stock unit awards. As of January 1, 2016, the aggregate unamortized fair value of all unvested RSUs was $158 million, which will be recognized on a straight-line basis over a weighted average vesting period of approximately 1.8 years.

Stock Option Activity

The following table summarizes stock option activity under the Company’s stock option plans (in millions, except per share amounts and remaining contractual lives):



	Number of Shares		Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Life (in years)	Aggregate Intrinsic Value
Options outstanding at July 3, 2015	6.8		$	50.00
Granted	1.6		84.41
Exercised	(0.5	)	29.49
Forfeited or expired	(0.1	)	49.08
Options outstanding at October 2, 2015	7.8		58.58
Exercised	(0.2	)	23.25
Forfeited or expired	(0.1	)	68.75
Options outstanding at January 1, 2016	7.5		$	59.54	4.5	$	107
Exercisable at January 1, 2016	3.8		$	43.58	3.3	$	88
Vested and expected to vest after January 1, 2016	7.4		$	58.92	4.4	$	107

Options granted during the three and six months ended January 1, 2016 had a weighted average fair value per share of $17.74 and $22.87, respectively. As of January 1, 2016, the Company had options outstanding to purchase an aggregate of 3.7 million shares with an exercise price below the quoted price of the Company’s stock on that date resulting in an aggregate intrinsic value of $107 million at that date. During the three and six months ended January 1, 2016, the aggregate intrinsic value of options exercised under the Company’s stock option plans was $9 million and $36 million, respectively, determined as of the date of exercise, as compared to $76 million and $163 million in the respective prior-year periods.

RSU Activity

The following table summarizes RSU activity under the Company's stock plans (in millions, except weighted average grant date fair value):



	Number of Shares		Weighted Average Grant-Date Fair Value
RSUs outstanding at July 3, 2015	3.0		$	73.80
Granted	1.2		84.39
Vested	(1.5	)	62.14
Forfeited	(0.1	)	81.55
RSUs outstanding at October 2, 2015	2.6		84.43
Granted	0.1		68.31
Vested	(0.1	)	61.61
Forfeited	(0.1	)	85.31
RSUs outstanding at January 1, 2016	2.5		84.71
Expected to vest after January 1, 2016	2.4		$	84.57

RSUs are generally settled in an equal number of shares of the Company’s common stock at the time of vesting of the units. The fair value of the shares underlying the RSU awards at the date of grant or assumption was $10 million and $109 million for awards granted in the three and six months ended January 1, 2016. These amounts are being recognized to expense over the corresponding vesting periods.

SARs Activity

During the three and six months ended January 1, 2016, the Company recognized a $10 million and $11 million benefit, respectively, related to adjustments to fair market value of stock appreciation rights ("SARs"), as compared to $8 million and $12 million of expense in the respective prior-year periods. The tax expense realized as a result of the aforementioned SARs benefit was $1 million and $1 million during the three and six months ended January 1, 2016, as compared to $2 million and $3 million of tax benefits during the three and six months ended January 2, 2015, respectively. The Company's SARs will be settled in cash upon exercise. The Company had a total liability of $29 million and $41 million related to SARs included in accrued expenses in the condensed consolidated balance sheet as of January 1, 2016 and July 3, 2015, respectively. As of January 1, 2016, all SARs issued to employees were fully vested, and the fair values are now solely subject to market price fluctuations. As of January 1, 2016, 0.5 million SARs were outstanding with a weighted average exercise price of $7.86. There were no SARs granted during the three and six months ended January 1, 2016.

Stock Repurchase Program

The Company's Board of Directors previously authorized $5.0 billion for the repurchase of the Company's common stock and approved the extension of its stock repurchase program to February 3, 2020. Effective October 21, 2015, in connection with the Company's planned SanDisk merger, the stock repurchase program was suspended. The Company did not repurchase any shares during the three months ended January 1, 2016. The Company repurchased 0.7 million shares for a total cost of $60 million during the six months ended January 1, 2016. The remaining amount available to be purchased under the Company’s stock repurchase program as of January 1, 2016 was $2.1 billion.

Dividends to Shareholders

On September 13, 2012, the Company announced that its Board of Directors had authorized the adoption of a quarterly cash dividend policy. Under the cash dividend policy, holders of the Company’s common stock receive dividends when and as declared by the Company’s Board of Directors. In the three months ended January 1, 2016, the Company declared a cash dividend of $0.50 per share to shareholders of record as of January 1, 2016, totaling $116 million, which was paid on January 15, 2016. In addition, in the three months ended October 2, 2015, the Company declared a cash dividend of $0.50 per share to shareholders of record as of October 2, 2015, totaling $116 million, which was paid on October 15, 2015. The Company may modify, suspend or cancel its cash dividend policy in any manner and at any time.

Investment by Unis

On September 30, 2015, the Company announced that it had entered into an agreement with Unis and Unis Union Information System Ltd., a subsidiary of Unis ("Investor"), pursuant to which Investor will make a $3.8 billion equity investment in the Company (the "Unis Investment"). Under the terms of the agreement for the Unis Investment, Investor has agreed to purchase 40,814,802 shares of newly issued common stock of the Company at a price of $92.50 per share and has agreed to a five-year position standstill, voting restrictions, and a five-year lock-up on its shares, with a limited number becoming available for transfer each year. Following the closing of the investment, Unis will have the right to nominate one representative for election to the Company's Board of Directors, so long as Unis holds more than 10% of the issued and outstanding shares of the Company's common stock. The performance of Investor’s obligations pursuant to the agreement, including payment of the purchase price for the shares, is guaranteed by Unis. The closing of the Unis Investment is subject to clearance by the U.S. Committee on Foreign Investment in the United States ("CFIUS"), the receipt of requisite regulatory approvals, including clearance by U.S. antitrust authorities and certain Chinese regulatory approvals, approval of the transaction by shareholders of Unis and other customary closing conditions. In November 2015, the Company and Unis withdrew from the CFIUS clearance process and refiled the notice with CFIUS in January 2016. The Company expects to receive a determination from CFIUS in February 2016. Although approval from Unis shareholders and approval from some of the Chinese regulatory authorities have been received, the Company cannot provide assurance that CFIUS clearance will be received or the other conditions to the completion of the Unis Investment will be satisfied in a timely manner or at all.

Pensions and Other Post-retirement Benefit Plans

6 Months Ended

Jan. 01, 2016

Compensation and Retirement Disclosure [Abstract]

Pensions and Other Post-retirement Benefit Plans

10. Pensions and Other Post-retirement Benefit Plans

The Company’s principal pension and other post-retirement benefit plans are in Japan. All pension and other post-retirement benefit plans outside of the Company’s Japanese plans were immaterial to the Company’s condensed consolidated financial statements for the three and six months ended January 1, 2016 and January 2, 2015. The expected long-term rate of return on the Japanese plan assets is 2.5%.

The following table presents the unfunded status of the benefit obligations and Japanese plan assets (in millions):



	January 1, 2016			July 3, 2015
Benefit obligation	$	240		$	231
Fair value of plan assets	(195		)	(185		)
Unfunded status	$	45		$	46

The following table presents the unfunded amounts as recognized on the Company’s condensed consolidated balance sheets (in millions):



	January 1, 2016		July 3, 2015
Current liabilities	$	1	$	1
Non-current liabilities	44		45
Net amount recognized	$	45	$	46

The net periodic benefit cost of the Company’s pension plans was not material to the condensed consolidated financial statements for the three and six months ended January 1, 2016 and January 2, 2015. The Company’s expected employer contribution for its Japanese defined benefit pension plans is $10 million in fiscal 2016.

Acquisitions

6 Months Ended

Jan. 01, 2016

Business Combinations [Abstract]

Acquisitions

11. Acquisitions

Planned SanDisk Merger

On October 21, 2015, the Company entered into the Merger Agreement with SanDisk, a global leader in NAND flash storage solutions, pursuant to which a subsidiary of the Company will merge with and into SanDisk, with SanDisk surviving as a wholly owned subsidiary of the Company. The merger is primarily intended to deepen the Company's expertise in non-volatile memory and enable the Company to vertically integrate into NAND, securing long-term access to solid state technology at a lower cost.

The Merger Agreement values SanDisk’s outstanding common stock at a value of $86.50 per share, or a total equity value of approximately $18.9 billion, based on the volume weighted average price of the Company’s common stock for the five trading days ending on October 20, 2015. If the Unis Investment closes prior to the merger, the Company will pay $85.10 per share in cash and issue 0.0176 shares of its common stock per share of SanDisk’s common stock; and if the Unis Investment has not occurred or has been terminated, the Company will pay $67.50 per share in cash and issue 0.2387 shares of its common stock per share of SanDisk’s common stock. The above allocation between cash and shares of the Company’s common stock is subject to reallocation, at the Company’s election, if the amount of cash that SanDisk has available at the closing of the merger falls below certain thresholds.

The merger consideration will be financed by a mix of cash, new debt financing and issuance of the Company’s common stock. In connection with the merger, the Company expects to enter into new debt facilities totaling $18.1 billion. The Company has received commitments for a $1.0 billion revolving credit facility, $3.0 billion in amortizing term loans, $6.0 billion in other term loans and $8.1 billion in secured and unsecured bridge facilities. The Company expects to issue approximately $5.1 billion in secured and unsecured notes in lieu of drawing the bridge facilities at close, with the balance of the bridge facilities to be repaid with available cash. The proceeds from the new debt facilities are expected to be used to pay part of the purchase price, refinance existing debt of both the Company and SanDisk and pay transaction related fees and expenses.

Consummation of the merger is subject to customary closing conditions, including without limitation: (i) the required approval by SanDisk shareholders and, if the Unis Investment has not occurred or has been terminated, approval by the Company’s shareholders; (ii) the expiration or early termination of the waiting period applicable to the consummation of the merger under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"), which expired on January 15, 2016, and the receipt of regulatory clearance under the foreign antitrust laws of the People's Republic of China, the European Union, Japan, South Africa, South Korea, Taiwan and Turkey; and (iii) if the Unis Investment has not been terminated and is a “covered transaction” for CFIUS purposes, or if CFIUS otherwise requests or requires a filing with respect to the merger, the approval of CFIUS. Clearance was obtained in Japan on January 22, 2016, in Taiwan on February 1, 2016 and in the European Union on February 4, 2016. Clearance was obtained in Singapore on January 19, 2016. In certain circumstances, a termination fee of up to $1.06 billion may be payable by the Company or a termination fee of up to $553.3 million may be payable by SanDisk, upon termination of the transaction as more fully described in the Merger Agreement.

Acquisition of Amplidata NV ("Amplidata")

On March 9, 2015, the Company acquired Amplidata, a developer of object storage software for public and private cloud data centers. As a result of the acquisition, Amplidata was fully integrated and became a wholly owned indirect subsidiary of the Company. The purchase price of the acquisition was approximately $267 million, consisting of $245 million funded with available cash at the time of the acquisition, $19 million related to the fair value of a previously-held cost method investment and $3 million related to the fair value of stock options assumed. The acquisition furthers the Company's strategy to expand into higher value data storage platforms and systems that address the growth in storage requirements in cloud data centers.

The Company identified and recorded the assets acquired and liabilities assumed at their estimated fair values at the date of acquisition, and allocated the remaining value of $215 million to goodwill. The values assigned to the acquired assets and liabilities are based on preliminary estimates of fair value available as of the date of this Quarterly Report on Form 10-Q, and may be adjusted during the measurement period of up to 12 months from the date of the acquisition as further information becomes available with any changes in the fair values potentially resulting in adjustments to goodwill. The individual tangible and intangible assets acquired as well as the liabilities assumed in the acquisition were immaterial to the Company's condensed consolidated financial statements.

The preliminary purchase price allocation for Amplidata is as follows (in millions):



	March 9, 2015
Tangible assets acquired and liabilities assumed	$	(24	)
Intangible assets	76
Goodwill	215
Total	$	267

Since the date of acquisition, the Company recorded an increase of $42 million to goodwill which primarily related to an adjustment to the value of deferred taxes acquired, an adjustment to the value of intangible assets acquired, and an adjustment for the fair value of stock options assumed in the acquisition of Amplidata. The primary area of the preliminary purchase price allocation that is not yet finalized due to information that may become available subsequently is income taxes. Any changes in the fair value could potentially result in adjustments to goodwill.

The $215 million of goodwill recognized is primarily attributable to the benefits the Company expects to derive from an ability to create hard disk drive storage solutions leveraging the core software acquired and is not expected to be deductible for tax purposes. The impact to revenue and net income attributable to Amplidata was immaterial to the Company’s condensed consolidated financial statements for the three and six months ended January 1, 2016.

- Definition

The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable).

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 10
-Section 50
-Paragraph 5
-URI http://asc.fasb.org/extlink&oid=56956515&loc=d3e1497-128463

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 10
-Section 50
-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=56956515&loc=d3e1490-128463

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 10
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=56956515&loc=d3e1392-128463

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 30
-Section 50
-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=35744584&loc=d3e7008-128479

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=56956515&loc=d3e1486-128463

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
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-Section 50
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-URI http://asc.fasb.org/extlink&oid=35744584&loc=d3e6927-128479

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 20
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=56956791&loc=d3e4845-128472

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
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-SubTopic 10
-Section 50
-Paragraph 6
-URI http://asc.fasb.org/extlink&oid=56956515&loc=d3e1500-128463

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 10
-Section 50
-Paragraph 7
-URI http://asc.fasb.org/extlink&oid=56956515&loc=d3e1524-128463

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
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-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=35744584&loc=d3e7000-128479

Reference 11: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
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-SubTopic 20
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-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=56956791&loc=d3e4922-128472

Reference 12: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
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-SubTopic 20
-Section 50
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-URI http://asc.fasb.org/extlink&oid=56956791&loc=d3e4934-128472

Reference 13: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 20
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=56956791&loc=d3e4926-128472

Reference 14: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 10
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=56956515&loc=d3e1383-128463

Reference 15: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 30
-Section 50
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-URI http://asc.fasb.org/extlink&oid=35744584&loc=d3e6996-128479

+ Details

Employee Termination, Asset Impairment and Other Charges

6 Months Ended

Jan. 01, 2016

Restructuring and Related Activities [Abstract]

Employee Termination Benefits and Other Charges

12. Employee Termination, Asset Impairment and Other Charges

The Company periodically incurs charges to realign its operations with anticipated market demand. The employee termination, asset impairment and other charges line item within the Company's condensed consolidated statements of income consisted of the following (in millions):



	Three Months Ended				Six Months Ended
	January 1, 2016		January 2, 2015		January 1, 2016		January 2, 2015
Employee termination benefits	$	18	$	34	$	56	$	42
Impairment of assets	—		19		8		20
Contract termination and other	9		—		19		—
Total	$	27	$	53	$	83	$	62

There were no impairment charges during the three months ended January 1, 2016. Impairment charges during the six months ended January 1, 2016 and January 2, 2015 relate to equipment and other long-lived assets.

The following table provides those amounts recorded as liabilities within the Company's condensed consolidated balance sheets:



	July 3, 2015		Accruals		Payments			October 2, 2015		Accruals		Payments			January 1, 2016
Employee termination benefits	$	10	$	38	$	(12	)	$	36	$	18	$	(30	)	$	24

Closure of Foreign Manufacturing Facility

On January 18, 2016, the Company announced it will be closing its head component front end wafer manufacturing facility in Odawara, Japan, in order to reduce manufacturing costs. The Company expects the closure to be substantially completed by the end of the third quarter of fiscal 2016 and it is expected to result in total pre-tax charges of approximately $200 million. These charges are expected to consist of approximately $90 million in asset charges, $90 million in employee termination costs and $20 million in contract termination and other costs. Approximately $110 million of these charges are expected to be cash expenditures. In the three months ended January 1, 2016, the Company recorded a $20 million charge related to the acceleration of depreciation on assets held at the Odawara facility as a result of the planned closure of the facility. This charge was recorded within cost of revenue in the condensed consolidated statements of income. The remaining charges are expected to be primarily incurred in the third quarter of fiscal 2016.

Recent Accounting Pronouncements	6 Months Ended
Recent Accounting Pronouncements	Jan. 01, 2016
Accounting Changes and Error Corrections [Abstract]
Recent Accounting Pronouncements	13. Recent Accounting Pronouncements Recently Adopted In November 2015, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2015-17, "Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes" ("ASU 2015-17"), which requires that deferred tax liabilities and assets for each tax-paying jurisdiction within each tax-paying component to be classified as noncurrent in a classified statement of financial position. The Company early adopted ASU 2015-17 during the second quarter of fiscal 2016 on a prospective basis, which resulted in the reclassification of approximately $165 million of net deferred tax assets as of January 1, 2016 from current assets to noncurrent assets. Since the Company adopted this standard on a prospective basis, no adjustments were made to prior-period balance sheets. Recently Issued In January 2016, the FASB issued ASU No. 2016-01, "Financial Instruments — Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities" ("ASU 2016-01"). The new standard requires equity investments to be measured at fair value with changes in fair value recognized in net income, simplifies the impairment assessment of equity investments without readily determinable fair values, eliminates the requirement to disclose the methods and significant assumptions used to estimate fair value, requires use of the exit price notion when measuring fair value, requires separate presentation in certain financial statements, and requires an evaluation of the need for a valuation allowance on a deferred tax asset related to available-for-sale securities. The new standard is effective for fiscal years beginning after December 15, 2017, which for the Company is the first quarter of fiscal 2019. The Company is currently evaluating the impact ASU 2016-01 will have on its consolidated financial statements and related disclosures. In September 2015, the FASB issued ASU No. 2015-16, "Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments" ("ASU 2015-16"), which eliminates the requirement for an acquirer in a business combination to account for measurement-period adjustments retrospectively. Acquirers must recognize measurement-period adjustments during the period of resolution, including the effect on earnings of any amounts they would have recorded in previous periods if the accounting had been completed at the acquisition date. The new standard is effective for fiscal years beginning after December 15, 2015, which for the Company is the first quarter of fiscal 2017. Earlier adoption is permitted for any interim and annual financial statements that have not yet been issued. The Company is currently evaluating the impact ASU 2015-16 will have on its consolidated financial statements and related disclosures. In April 2015, the FASB issued ASU 2015-03, "Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs" ("ASU 2015-03"). The new standard requires debt issuance costs related to a recognized debt liability to be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The new standard is effective for fiscal years and interim periods within those fiscal years, beginning after December 15, 2015, which for the Company is the first quarter of fiscal 2017. The Company is currently evaluating the impact ASU 2015-03 will have on its consolidated financial statements and related disclosures. In February 2015, the FASB issued ASU 2015-02, "Consolidation (Topic 810): Amendments to the Consolidation Analysis" ("ASU 2015-02"). The new standard eliminates the presumption that a general partner should consolidate a limited partnership, requires that a reporting entity determine whether it has a variable interest in the entity being evaluated for consolidation, eliminates the requirement to consolidate variable interest entities ("VIEs") caused by certain fees paid to decision makers, and eliminates the indefinite deferral of FASB Statement No. 167 included in ASU 2010-10. The new standard is effective for fiscal years beginning after December 15, 2015, which for the Company is the first quarter of fiscal 2017. Early adoption is permitted. The Company is currently evaluating the impact ASU 2015-02 will have on its consolidated financial statements and related disclosures. In May 2014, the FASB issued ASU 2014-09, "Revenue from Contracts with Customers" ("ASU 2014-09"), which amends the guidance in former Accounting Standards Codification Topic 605, "Revenue Recognition," to provide a single, comprehensive revenue recognition model for all contracts with customers. The new standard requires an entity to recognize revenue in a manner that depicts the transfer of promised goods or services to customers in amounts that reflect the consideration to which an entity expects to be entitled in exchange for those goods or services. The new standard also requires entities to enhance disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. In August 2015, the FASB issued ASU 2015-14, which deferred the effective date of this ASU by one year. The new standard allows for either a full retrospective or a modified retrospective transition method and is effective for fiscal years and interim periods within those years beginning after December 15, 2017, which for the Company is the first quarter of fiscal 2019, and early adoption is permitted beginning after December 15, 2016. The Company has not yet selected a transition method and is currently evaluating the impact ASU 2014-09 will have on its consolidated financial statements and related disclosures.

Basis of Presentation (Policies)	6 Months Ended
Basis of Presentation (Policies)	Jan. 01, 2016
Accounting Policies [Abstract]
Fiscal Period, Policy [Policy Text Block]	The Company's fiscal year ends on the Friday nearest to June 30 and typically consists of 52 weeks. Approximately every six years, the Company reports a 53-week fiscal year to align its fiscal year with the foregoing policy. The Company's fiscal second quarters ended January 1, 2016 and January 2, 2015 both consisted of 13 weeks. The six months ended January 1, 2016 and January 2, 2015 consisted of 26 and 27 weeks, respectively. Fiscal 2016 will be comprised of 52 weeks and will end on July 1, 2016. Fiscal year 2015 was comprised of 53 weeks and ended on July 3, 2015.
Use of Estimates and Assumption	Company management has made estimates and assumptions relating to the reporting of certain assets and liabilities in conformity with U.S. GAAP. These estimates and assumptions have been applied using methodologies that are consistent throughout the periods presented. However, actual results could differ materially from these estimates.

Supplemental Financial Statement Data (Tables)

6 Months Ended

Jan. 01, 2016

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Inventories; Property, Plant and Equipment; and Other Intangible Assets



	January 1, 2016			July 3, 2015
	(in millions)
Inventories:
Raw materials and component parts	$	130		$	168
Work-in-process	474			500
Finished goods	634			700
Total inventories	$	1,238		$	1,368
Property, plant and equipment:
Property, plant and equipment	$	8,716		$	8,604
Accumulated depreciation	(5,915		)	(5,639		)
Property, plant and equipment, net	$	2,801		$	2,965
Other intangible assets:
Other intangible assets	$	1,018		$	1,008
Accumulated amortization	(726		)	(676		)
Other intangible assets, net	$	292		$	332

Changes in Warranty Accrual

Changes in the warranty accrual were as follows (in millions):



	Three Months Ended						Six Months Ended
	January 1, 2016			January 2, 2015			January 1, 2016			January 2, 2015
Warranty accrual, beginning of period	$	218		$	201		$	221		$	182
Charges to operations	43			50			88			99
Utilization	(40		)	(44		)	(94		)	(93		)
Changes in estimate related to pre-existing warranties	4			16			10			35
Warranty accrual, end of period	$	225		$	223		$	225		$	223

Available-for-sale Securities [Table Text Block]

The following tables summarize, by major type, the fair value and cost basis of the Company’s investments (in millions):



	January 1, 2016
	Cost Basis		Unrealized Losses			Fair Value
Available-for-sale securities:
U.S. Treasury securities	$	306	$	(1	)	$	305
U.S. Government agency securities	116		—			116
Commercial paper	50		—			50
Certificates of deposit	260		—			260
Total	$	732	$	(1	)	$	731



	July 3, 2015
	Cost Basis		Unrealized Gains (Losses)		Fair Value
Available-for-sale securities:
U.S. Treasury securities	$	287	$	—	$	287
U.S. Government agency securities	95		—		95
Commercial paper	109		—		109
Certificates of deposit	99		—		99
Total	$	590	$	—	$	590

Investments Classified by Contractual Maturity Date [Table Text Block]

The fair value of the Company’s investments classified as available-for-sale securities at January 1, 2016, by remaining contractual maturity, were as follows (in millions):



	Cost Basis		Fair Value
Due in less than one year (short-term investments):	$	497	$	497
Due in one to five years (included in other non-current assets):	235		234
Total	$	732	$	731