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Cover Page - USD ($) $ in Billions	12 Months Ended
Cover Page - USD ($) $ in Billions	Jun. 28, 2019	Aug. 14, 2019	Dec. 28, 2018
Cover page.
Document Type	10-K
Document Annual Report	true
Document Period End Date	Jun. 28, 2019
Document Transition Report	false
Entity File Number	1-8703
Entity Registrant Name	WESTERN DIGITAL CORP
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	33-0956711
Entity Address, Address Line One	5601 Great Oaks Parkway
Entity Address, City or Town	San Jose,
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	95119
City Area Code	408
Local Phone Number	717-6000
Title of 12(b) Security	Common Stock, $.01 Par Value Per Share
Trading Symbol	WDC
Security Exchange Name	NASDAQ
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Public Float			$ 9.5
Entity Common Stock, Shares Outstanding (in shares)		296,003,875
Entity Central Index Key	0000106040
Current Fiscal Year End Date	--06-28
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	FY
Amendment Flag	false

Consolidated Balance Sheets - USD ($) $ in Millions	Jun. 28, 2019	Jun. 29, 2018
Current assets:
Cash and cash equivalents	$ 3,455	$ 5,005
Accounts receivable, net	1,204	2,197
Inventories	3,283	2,944
Other current assets	535	492
Total current assets	8,477	10,638
Non-current assets:
Property, plant and equipment, net	2,843	3,095
Notes receivable and investments in Flash Ventures	2,791	2,105
Goodwill	10,076	10,075
Other intangible assets, net	1,711	2,680
Other non-current assets	472	642
Total assets	26,370	29,235
Current liabilities:
Accounts payable	1,567	2,265
Accounts payable to related parties	331	259
Accrued expenses	1,296	1,274
Accrued compensation	347	479
Current portion of long-term debt	276	179
Total current liabilities	3,817	4,456
Non-current liabilities:
Long-term debt	10,246	10,993
Other liabilities	2,340	2,255
Total liabilities	16,403	17,704
Commitments and contingencies (Notes 6, 9, 13 and 16)
Shareholders’ equity:
Preferred stock, $0.01 par value; authorized — 5 shares; issued and outstanding — none	0	0
Common stock, $0.01 par value; authorized — 450 shares; issued — 312 shares in 2019 and 2018; outstanding — 295 shares in 2019 and 296 shares in 2018	3	3
Additional paid-in capital	3,851	4,254
Accumulated other comprehensive loss	(68)	(39)
Retained earnings	7,449	8,757
Treasury stock — common shares at cost; 17 shares in 2019 and 16 shares in 2018	(1,268)	(1,444)
Total shareholders’ equity	9,967	11,531
Total liabilities and shareholders’ equity	$ 26,370	$ 29,235

Consolidated Balance Sheets (Parenthetical) - $ / shares	Jun. 28, 2019	Jun. 29, 2018
Statement of Financial Position [Abstract]
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, authorized (in shares)	5,000,000	5,000,000
Preferred stock, issued (in shares)	0	0
Preferred stock, outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, authorized (in shares)	450,000,000	450,000,000
Common stock, issued (in shares)	312,000,000	312,000,000
Common stock, outstanding (in shares)	295,000,000	296,000,000
Treasury stock (in shares)	17,000,000	16,000,000

Consolidated Statements of Operations - USD ($) shares in Millions, $ in Millions	3 Months Ended								12 Months Ended
	Jun. 28, 2019	Mar. 29, 2019	Dec. 28, 2018	Sep. 28, 2018	Jun. 29, 2018	Mar. 30, 2018	Dec. 29, 2017	Sep. 29, 2017	Jun. 28, 2019	Jun. 29, 2018	Jun. 30, 2017
Income Statement [Abstract]
Revenue, net	$ 3,634	$ 3,674	$ 4,233	$ 5,028	$ 5,117	$ 5,013	$ 5,336	$ 5,181	$ 16,569	$ 20,647	$ 19,093
Cost of revenue									12,817	12,942	13,021
Gross profit	465	579	1,044	1,664	1,852	1,927	2,013	1,913	3,752	7,705	6,072
Operating expenses:
Research and development									2,182	2,400	2,441
Selling, general and administrative									1,317	1,473	1,445
Employee termination, asset impairment, and other charges									166	215	232
Total operating expenses									3,665	4,088	4,118
Operating income	(381)	(394)	176	686	843	914	955	905	87	3,617	1,954
Interest and other income (expense):
Interest income									57	60	26
Interest expense									(469)	(676)	(847)
Other income (expense), net									38	(916)	(364)
Total interest and other expense, net									(374)	(1,532)	(1,185)
Income (loss) before taxes									(287)	2,085	769
Income tax expense									467	1,410	372
Net income (loss)	$ (197)	$ (581)	$ (487)	$ 511	$ 756	$ 61	$ (823)	$ 681	$ (754)	$ 675	$ 397
Income (loss) per common share
Basic (in dollars per share)	$ (0.67)	$ (1.99)	$ (1.68)	$ 1.75	$ 2.53	$ 0.20	$ (2.78)	$ 2.31	$ (2.58)	$ 2.27	$ 1.38
Diluted (in dollars per share)	$ (0.67)	$ (1.99)	$ (1.68)	$ 1.71	$ 2.46	$ 0.20	$ (2.78)	$ 2.23	$ (2.58)	$ 2.20	$ 1.34
Weighted average shares outstanding:
Basic (in shares)									292	297	288
Diluted (in shares)									292	307	296
Cash dividends declared per share (in USD per share)									$ 2.00	$ 2.00	$ 2.00

Consolidated Statements of Comprehensive Income - USD ($) $ in Millions	3 Months Ended								12 Months Ended
	Jun. 28, 2019	Mar. 29, 2019	Dec. 28, 2018	Sep. 28, 2018	Jun. 29, 2018	Mar. 30, 2018	Dec. 29, 2017	Sep. 29, 2017	Jun. 28, 2019	Jun. 29, 2018	Jun. 30, 2017
Statement of Comprehensive Income [Abstract]
Net income (loss)	$ (197)	$ (581)	$ (487)	$ 511	$ 756	$ 61	$ (823)	$ 681	$ (754)	$ 675	$ 397
Other comprehensive income (loss), before tax:
Actuarial pension gain (loss)									(39)	(2)	39
Foreign currency translation adjustment									28	18	(115)
Net unrealized gain (loss) on derivative contracts and available-for-sale securities									(39)	7	(75)
Total other comprehensive income (loss), before tax									(50)	23	(151)
Income tax benefit (expense) related to items of other comprehensive income (loss), before tax									21	(4)	(10)
Other comprehensive income (loss), net of tax									(29)	19	(161)
Total comprehensive income (loss)									$ (783)	$ 694	$ 236

Consolidated Statements of Cash Flows - USD ($) $ in Millions	12 Months Ended
	Jun. 28, 2019	Jun. 29, 2018	Jun. 30, 2017
Cash flows from operating activities
Net income (loss)	$ (754)	$ 675	$ 397
Adjustments to reconcile net income (loss) to net cash provided by operations:
Depreciation and amortization	1,812	2,056	2,128
Stock-based compensation	306	377	394
Deferred income taxes	374	(348)	12
Loss on disposal of assets	39	21	18
Write-off of issuance costs and amortization of debt discounts	38	221	285
Cash premium on extinguishment of debt	0	(720)	0
Loss on convertible debt and related instruments	0	0	5
Non-cash portion of employee termination, asset impairment and other charges	0	16	13
Other non-cash operating activities, net	(8)	(19)	94
Changes in:
Accounts receivable, net	993	(244)	(487)
Inventories	(339)	(598)	(204)
Accounts payable	(588)	(15)	223
Accounts payable to related parties	72	53	38
Accrued expenses	(42)	(17)	231
Accrued compensation	(135)	(26)	115
Other assets and liabilities, net	(221)	1,333	175
Net cash provided by operating activities	1,547	4,205	3,437
Cash flows from investing activities
Purchases of property, plant and equipment	(876)	(835)	(578)
Proceeds from the sale of property, plant and equipment	119	26	21
Acquisitions, net of cash acquired	0	(100)	0
Purchases of investments	(79)	(89)	(281)
Proceeds from sale of investments	175	48	94
Proceeds from maturities of investments	7	19	417
Investments in Flash Ventures	0	0	(20)
Notes receivable issuances to Flash Ventures	(1,364)	(1,313)	(549)
Notes receivable proceeds from Flash Ventures	766	571	292
Strategic investments and other, net	(20)	18	(32)
Net cash used in investing activities	(1,272)	(1,655)	(636)
Cash flows from financing activities
Issuance of stock under employee stock plans	118	220	235
Taxes paid on vested stock awards under employee stock plans	(115)	(171)	(124)
Excess tax benefits from employee stock plans	0	0	119
Proceeds from acquired call option	0	0	61
Settlement of convertible debt	0	0	(492)
Repurchases of common stock	(563)	(591)	0
Dividends paid to shareholders	(584)	(593)	(574)
Settlement of debt hedge contracts	0	28	(21)
Proceeds from (repayment of) revolving credit facility	(500)	500	0
Repayment of debt	(181)	(17,074)	(11,697)
Proceeds from debt	0	13,840	7,908
Debt issuance costs	(4)	(59)	(10)
Net cash used in financing activities	(1,829)	(3,900)	(4,595)
Effect of exchange rate changes on cash	4	1	(3)
Net decrease in cash and cash equivalents	(1,550)	(1,349)	(1,797)
Cash and cash equivalents, beginning of year	5,005	6,354	8,151
Cash and cash equivalents, end of year	3,455	5,005	6,354
Supplemental disclosure of cash flow information:
Cash paid for income taxes	377	220	184
Cash paid for interest	431	708	777
Shares issued in conjunction with settlement of convertible notes	0	0	16
Shares received in conjunction with assumed call options	$ 0	$ 0	$ (11)

Consolidated Statements of Shareholders' Equity - USD ($) shares in Millions, $ in Millions	Total	Common Stock	Treasury Stock	Additional Paid-In Capital	Accumulated Other Comprehensive Income (Loss)	Retained Earnings
Beginning balance at Jul. 01, 2016	$ 11,145	$ 3	$ 2,238	$ 4,429	$ 103	$ 8,848
Beginning balance (in shares) at Jul. 01, 2016		312	28
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Shares issued in conjunction with settlement of convertible notes	16			16
Shares received in conjunction with assumed call options	(11)		$ (11)
Ending balance at Jun. 30, 2017	11,418	$ 3	$ 1,666	4,506	(58)	8,633
Ending balance (in shares) at Jun. 30, 2017		312	18
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	675					675
Employee stock plans	49		$ 813	(764)
Employee stock plans (in shares)			9
Stock-based compensation	377			377
Shares issued in conjunction with settlement of convertible notes	0
Shares received in conjunction with assumed call options	0
Equity value of convertible debt issuance, net of deferred taxes	125			125
Repurchases of common stock	(591)		$ (591)
Repurchases of common stock (in shares)			(7)
Dividends to shareholders	(592)			29		(621)
Actuarial pension gain	(1)				(1)
Foreign currency translation adjustment	18				18
Net unrealized loss on derivative contracts and available-for-sale securities	2				2
Ending balance at Jun. 29, 2018	11,531	$ 3	$ 1,444	4,254	(39)	8,757
Ending balance (in shares) at Jun. 29, 2018		312	16
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	(754)					(754)
Employee stock plans	3		$ 739	(736)
Employee stock plans (in shares)			7
Stock-based compensation	306			306
Shares issued in conjunction with settlement of convertible notes	0
Shares received in conjunction with assumed call options	0
Repurchases of common stock	(563)		$ (563)
Repurchases of common stock (in shares)			(8)
Dividends to shareholders	(583)			27		(610)
Actuarial pension gain	(34)				(34)
Foreign currency translation adjustment	25				25
Net unrealized loss on derivative contracts	(20)				(20)
Ending balance at Jun. 28, 2019	$ 9,967	$ 3	$ 1,268	$ 3,851	$ (68)	$ 7,449
Ending balance (in shares) at Jun. 28, 2019		312	17

Organization and Basis of Presentation (Notes)	12 Months Ended
Organization and Basis of Presentation (Notes)	Jun. 28, 2019
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Organization and Basis of Presentation	Organization and Basis of Presentation Western Digital Corporation (“Western Digital” or “the Company”) is a leading developer, manufacturer, and provider of data storage devices and solutions that address the evolving needs of the information technology (“IT”) industry and the infrastructure that enables the proliferation of data in virtually every other industry. The Company creates environments for data to thrive. The Company is driving the innovation needed to help customers capture, preserve, access and transform an ever-increasing diversity of data. Everywhere data lives, from advanced data centers to mobile sensors to personal devices, the Company’s industry-leading solutions deliver the possibilities of data. The Company’s broad portfolio of technology and products address the following key end markets: Client Devices; Data Center Devices and Solutions; and Client Solutions. It also generates license and royalty revenue from its extensive intellectual property (“IP”), which is included in each of these three end market categories. Basis of Presentation The Company has prepared its Consolidated Financial Statements in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) and has adopted accounting policies and practices which are generally accepted in the industry in which it operates. The Company’s significant accounting policies are summarized below. Fiscal Year The Company’s fiscal year ends on the Friday nearest to June 30 and typically consists of 52 weeks. Approximately every five to six years, the Company reports a 53-week fiscal year to align the fiscal year with the foregoing policy. Fiscal years 2019, which ended on June 28, 2019, 2018, which ended on June 29, 2018, and 2017, which ended on June 30, 2017, are each comprised of 52 weeks, with all quarters presented consisting of 13 weeks. Fiscal year 2020, which ends on July 3, 2020, will be comprised of 53 weeks, with the first quarter consisting of 14 weeks and the remaining quarters consisting of 13 weeks each. Basis of Consolidation The Consolidated Financial Statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. The functional currency of most of the Company’s foreign subsidiaries is the U.S. dollar. The accounts of these foreign subsidiaries have been remeasured using the U.S. dollar as the functional currency. Gains or losses resulting from remeasurement of these accounts from local currencies into U.S. dollars were immaterial to the Consolidated Financial Statements. Financial statements of the Company’s foreign subsidiaries for which the functional currency is the local currency are translated into U.S. dollars using the exchange rate at each balance sheet date for assets and liabilities and a weighted average exchange rate for each period for statement of operations items. Translation adjustments are recorded in accumulated other comprehensive income, a component of shareholders’ equity. Use of Estimates Company management has made estimates and assumptions relating to the reporting of certain assets and liabilities in conformity with U.S. GAAP. These estimates and assumptions have been applied using methodologies that are consistent throughout the periods presented. However, actual results could differ materially from these estimates. Cash Equivalents The Company’s cash equivalents represent highly liquid investments in money market funds, which are invested in U.S. Treasury securities and U.S. Government agency securities as well as bank certificates of deposit with original maturities at purchase of three months or less. Cash equivalents are carried at cost plus accrued interest, which approximates fair value. Available-for-Sale Securities From time to time, the Company invests in U.S. Treasury securities, U.S. and International Government agency securities, certificates of deposit, asset-backed securities, and corporate and municipal notes and bonds, with original maturities at purchase of more than three months. These investments are classified as available-for-sale securities and included within other non-current assets in the Consolidated Balance Sheets. Available-for-sale securities are stated at fair value with unrealized gains and losses included in accumulated other comprehensive income (loss), which is a component of shareholders’ equity. Gains and losses on available-for-sale securities are recorded based on the specific identification method. The Company evaluates the available-for-sale securities in an unrealized loss position for other-than-temporary impairment. The amortized cost of available-for-sale securities is adjusted for amortization of premiums and accretion of discounts to maturity. Such amortization and accretion are included in Other income (expense), net in the Consolidated Statements of Operations. In addition, realized gains and losses are included in Other income (expense), net in the Consolidated Statements of Operations. Equity Investments In January 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-01, “Financial Instruments — Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities” (“ASU 2016-01”). ASU 2016-01 provides guidance related to accounting for equity investments, financial liabilities under the fair value option and the presentation and disclosure requirements for financial instruments. Marketable equity securities previously classified as available-for-sale equity investments are now measured and recorded at fair value with changes in fair value recorded within Other income (expense), net in the Consolidated Statements of Operations rather than as a component of Other comprehensive income as in prior years. In addition, the FASB clarified guidance related to the valuation allowance assessment when recognizing deferred tax assets resulting from unrealized losses on available-for-sale debt securities. The Company adopted this standard effective June 30, 2018. The adoption of this standard did not have a material impact on the Company’s Consolidated Financial Statements. The Company enters into certain strategic investments for the promotion of business and strategic objectives. The equity method of accounting is used if the Company’s ownership interest is greater than or equal to 20% but less than a majority or where the Company has the ability to exercise significant influence over operating and financial policies. The Company’s equity in the earnings or losses in equity-method investments is recognized in Other income (expense), net, in the Consolidated Statements of Operations. If the Company’s ownership interest is less than 20% and the Company does not have the ability to exercise significant influence over operating and financial policies of the investee, the Company accounts for these investments at fair value, or if these equity securities do not have a readily determinable fair value (“RDFV”), these securities are measured and recorded using the measurement alternative under ASU 2016-01, which is cost minus impairment, if any, plus or minus changes resulting from observable price changes. Previously, these investments were accounted for under the cost method of accounting. These investments are recorded within Other non-current assets in the Consolidated Balance Sheets and are periodically analyzed to determine whether or not there are indicators of impairment. Variable Interest Entities The Company evaluates its investments and other significant relationships to determine whether any investee is a variable interest entity (“VIE”). If the Company concludes that an investee is a VIE, the Company evaluates its power to direct the activities of the investee, its obligation to absorb the expected losses of the investee and its right to receive the expected residual returns of the investee to determine whether the Company is the primary beneficiary of the investee. If the Company is the primary beneficiary of a VIE, the Company consolidates such entity and reflects the non-controlling interest of other beneficiaries of that entity. The Company does not consolidate any cost method investment or equity method investment entities. Fair Value of Financial Instruments The carrying amounts of cash equivalents, 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 fair value of investments that are not accounted for under the equity method is based on appropriate market information. Inventories The Company values inventories at the lower of cost (first-in, first out) or net realizable value. The first-in, first-out (“FIFO”) method is used to value the cost of the majority of the Company’s inventories. Inventory write-downs are recorded for the valuation of inventory at the lower of cost or net realizable value by analyzing market conditions and estimates of future sales prices as compared to inventory costs and inventory balances. The Company evaluates inventory balances for excess quantities and obsolescence on a regular basis by analyzing estimated demand, inventory on hand, sales levels and other information and reduces inventory balances to net realizable value for excess and obsolete inventory based on this analysis. Unanticipated changes in technology or customer demand could result in a decrease in demand for one or more of the Company’s products, which may require a write down of inventory that could materially affect operating results. Property, Plant and Equipment Property and equipment are carried at cost less accumulated depreciation and amortization. The cost of property, plant and equipment is depreciated over the estimated useful lives of the respective assets. The Company’s buildings are depreciated over periods ranging from fifteen to thirty-five years. The majority of the Company’s machinery and equipment, software, and furniture and fixtures, are depreciated on a straight-line basis over a period of two to seven years. Leasehold improvements are amortized over the lesser of the estimated useful lives of the assets or the related lease terms. Business Combinations The application of acquisition accounting to a business combination requires that the Company identify the individual assets acquired and liabilities assumed and estimate the fair value of each. The fair value of assets acquired and liabilities assumed in a business acquisition are recognized at the acquisition date using a combination of valuation techniques, with the purchase price exceeding the fair values being recognized as goodwill. Determining fair value of identifiable assets, particularly intangibles, liabilities acquired and contingent obligations assumed requires management to make estimates. In certain circumstances, the allocations of the excess purchase price are based upon preliminary estimates and assumptions and subject to revision when the Company receives final information, including appraisals and other analyses. Accordingly, the measurement period for such purchase price allocations will end when the information, or the facts and circumstances, becomes available, but will not exceed twelve months. The Company will recognize measurement-period adjustments during the period of resolution, including the effect on earnings of any amounts that would have been recorded in previous periods if the accounting had been completed at the acquisition date. Goodwill and intangible assets often represent a significant portion of the assets acquired in a business combination. The Company recognizes the fair value of an acquired intangible apart from goodwill whenever the intangible arises from contractual or other legal rights, or when it can be separated or divided from the acquired entity and sold, transferred, licensed, rented or exchanged, either individually or in combination with a related contract, asset or liability. Intangible assets consist primarily of technology, customer relationships, and trade name and trademarks acquired in business combinations and in-process research and development (“IPR&D”). The Company’s assessment of IPR&D also includes consideration of the risk of the projects not achieving technological feasibility. Goodwill and Other Long-Lived Assets Goodwill is not amortized. Instead, it is tested for impairment on an annual basis or more frequently whenever events or changes in circumstances indicate that goodwill may be impaired. The Company performs an annual impairment test as of the beginning of its fiscal fourth quarter. The Company uses qualitative factors to determine whether goodwill is more likely than not impaired and whether a quantitative test for impairment is considered necessary. If the Company concludes from the qualitative assessment that goodwill is more likely than not impaired, the Company is required to perform a quantitative approach to determine the amount of impairment. The Company’s assessment resulted in no impairment of goodwill in 2019, 2018, or 2017. The Company is required to use judgment when applying the goodwill impairment test, including the identification of reporting units, assignment of assets, liabilities and goodwill to reporting units, and determination of the fair value of each reporting unit. In addition, the estimates used to determine the fair value of reporting units may change based on results of operations, macroeconomic conditions or other factors. Changes in these estimates could materially affect the Company’s assessment of the fair value and goodwill impairment. If the Company’s stock price decreases significantly, goodwill could become impaired, which could result in a material charge and adversely affect the Company’s results of operations. IPR&D is an intangible asset accounted as an indefinite-lived asset until the completion or abandonment of the associated research and development effort. During the development period, the Company conducts an IPR&D impairment test annually and whenever events or changes in facts and circumstances indicate that it is more likely than not that the IPR&D is impaired. Events which might indicate impairment include, but are not limited to, adverse cost factors, strategic decisions made in response to economic, market, and competitive conditions, and the impact of the economic environment the Company and on its customer base. If impairment is indicated, the impairment is measured as the amount by which the carrying amount of the assets exceeds the fair value of the assets. Other long-lived intangible assets are amortized over their estimated useful lives based on the pattern in which the economic benefits are expected to be received. Long-lived assets are tested for recoverability whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. If impairment is indicated, the impairment is measured as the amount by which the carrying amount of the assets exceeds the fair value of the assets. The estimates of fair value require evaluation of future market conditions and product lifecycles as well as projected revenue, earnings and cash flow. See Note 7, Goodwill and Other Intangible Assets, for additional disclosures related to the Company’s other intangible assets. Revenue and Accounts Receivable In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606),” which superseded the requirements in Accounting Standards Codification (“ASC”) 605 “Revenue Recognition” (Topic 605). Topic 606 outlines a comprehensive five-step revenue recognition model based on the principle that an entity should recognize revenue when control of the promised goods or services is transferred to customers at an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. Topic 606 also requires more detailed disclosures to enable users of financial statements to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The Company adopted Topic 606 effective June 30, 2018, using the modified retrospective method to all contracts that were not completed contracts as of the beginning of the fiscal year. Results for reporting periods beginning with fiscal year 2019 are presented under Topic 606, while prior period information presented on the financial statements or elsewhere in this Annual Report on Form 10-K is reported under the Company’s historic accounting policies under Topic 605 in effect for those periods and is not adjusted to reflect the retrospective effect of the adoption of Topic 606. The cumulative effect of adopting Topic 606 was a post-tax increase to the opening retained earnings of $56 million as of June 30, 2018, which was primarily related to our license and royalty revenue arrangements. These arrangements had no remaining performance obligations but were previously recognized under Topic 605 when they were reported to the Company by its licensees, which was generally one quarter in arrears from the licensees’ sales of the licensed products. Adoption of the standard did not have a material impact on the Company’s financial position, results of operations, and cash flows for the year ended June 28, 2019, and the Company expects that the impact of the adoption of the new standard will not be material to its results of operations prospectively. The Company offers a broad range of data storage products that include Client Devices, Data Center Devices and Solutions, and Client Solutions. Client Devices consist of hard disk drives (“HDDs”) and solid state drives (“SSDs”) for computing devices; flash-based embedded storage products; and flash-based memory wafers. Data Center Devices and Solutions consist of high-capacity enterprise HDDs and high-performance enterprise SSDs, data center software and system solutions. Client Solutions consist of HDDs and SSDs embedded into external storage products and removable flash-based products. The Company also generates license and royalty revenue related to its IP patent licenses. The Company recognizes revenue when it satisfies a performance obligation by transferring control over a product or service to the customer. The transaction price to be recognized as revenue is adjusted for variable consideration, such as sales incentives, and excludes amounts collected on behalf of third parties, including taxes imposed by governmental authorities. The Company’s performance obligations are typically not constrained based on the Company’s history with similar transactions and that uncertainties are resolved in a fairly short period of time. Substantially all of the Company’s revenue is from the sale of tangible products for which the performance obligations are satisfied at a point in time, generally upon delivery. The Company’s services revenue mainly includes post contract customer support, warranty as a service and maintenance contracts. The performance obligations for the Company’s services are generally satisfied ratably over the service period based on the nature of the service provided and contract terms. Similarly, revenue from patent licensing arrangements is recognized based on whether the arrangement provides the customer a right to use or right to access the IP. Revenue for a right to use arrangement is recognized at the time the control of the license is transferred to the customer. Revenue for a right to access arrangement is recognized over the contract period using the time lapse method. For the sales-based royalty arrangements, the Company estimates and recognizes revenue in the period in which customers’ licensable sales occur. The Company’s customer payment terms are typically less than two months from the date control over the product or service is transferred to the customer. The Company uses the practical expedient and does not recognize a significant financing component for payment considerations of less than one year. The financing components of contracts with payment terms were not material. The Company provides distributors and retailers (collectively referred to as “resellers”) with limited price protection for inventories held by resellers at the time of published list price reductions and/or a right of return. The Company also provides resellers and original equipment manufacturers (“OEMs”) with other sales incentive programs. The Company uses judgment in its assessment of variable consideration in contracts to be included in the transaction price. The Company uses the expected value method to arrive at the amount of variable consideration. The Company believes the estimate of variable consideration is not constrained and that the expected value method is the appropriate estimate of the amount of variable consideration based on the fact that the Company has a large number of contracts with similar characteristics. The Company’s methodology for the estimates is based on several factors, including anticipated price decreases during the reseller holding period, resellers’ sell-through and inventory levels, estimated amounts to be reimbursed to qualifying customers, historical pricing information, historical and anticipated returns information and customer claim processing. The Company also has programs under which it reimburses qualified distributors and retailers for certain marketing expenditures, which are typically recorded as a reduction of the transaction price and, therefore, of revenue. The Company nets sales rebates against open customer receivable balances if the criteria to offset are met, otherwise they are recorded within other accrued liabilities. An immaterial amount of the Company’s revenue arrangements include contracts that contain more than one performance obligation, which are typically comprised of tangible products, software and support services for multiple distinct licenses. For these contracts with multiple performance obligations, the Company evaluates whether each deliverable is a distinct promise and should be accounted for as a separate performance obligation. If a promised good or service is not distinct in accordance with the revenue guidance, the Company combines that good or service with the other promised goods or services in the arrangement until a distinct bundle of goods is identified. The Company allocates the transaction price to the performance obligations of each distinct product or service, or distinct bundle, based on their relative standalone selling prices. Where a separate standalone selling price is not available, the transaction price is based on the Company’s best estimate of the standalone selling price. The Company uses one or a combination of more than one of the following methods to estimate the standalone selling price: the adjusted market assessment approach, the expected cost plus a margin approach, or another suitable method based on the facts and circumstances. Contract assets represent the Company’s rights to consideration where performance obligations are completed but the customer payments are not due until another performance obligation is satisfied. The Company did not have any contract assets as of either June 28, 2019 or the date of adoption of Topic 606. The Company incurs sales commissions and other direct incremental costs to obtain sales contracts. The Company has applied the practical expedient to recognize the direct incremental costs of obtaining contracts as an expense when incurred if the amortization period is expected to be one year or less or the amount is not material, with these costs charged to selling, general and administrative expenses. Prior to the adoption of the new revenue standard, the Company’s policy was to expense all contract acquisition costs as incurred. Other direct incremental costs to obtain contracts that have an expected benefit of greater than one year are amortized over the period of expected cash flows from the related contracts, and the amortization expense is recorded as a reduction to revenue. Total capitalized contract costs and the related amortization as of and for the year ended June 28, 2019 were not material. Contract liabilities relate to customers’ payments in advance of performance under the contract and primarily relate to remaining performance obligations under support and maintenance contracts. As of June 28, 2019 and the date of adoption of Topic 606, contract liabilities were $43 million and $120 million, respectively, and were reflected in Accrued expenses. Changes in the contract liability balance during the year ended June 28, 2019 include $104 million of revenue recognized during the period, of which the substantial majority relates to the balance that was deferred at June 29, 2018, partially offset by payments received and billings in advance of satisfying performance obligations. The Company applies the practical expedients and does not disclose transaction price allocated to the remaining performance obligations for (i) arrangements that have an original expected duration of one year or less, which mainly consist of the support and maintenance contracts, and (ii) variable consideration amounts for sale-based or usage-based royalties for IP license arrangements, which typically range longer than one year. Remaining performance obligations are mainly attributed to right-to-access patent license arrangements and customer support and service contracts which will be recognized over the remaining contract period. The transaction price allocated to the remaining performance obligations as of June 28, 2019 was $191 million, which is mainly attributable to the functional IP license and service arrangements. The Company expects to recognize this amount as revenue as follows: $65 million in fiscal 2020, $48 million in fiscal 2021, $44 million in fiscal 2022, and $34 million thereafter. The Company records an allowance for doubtful accounts by analyzing specific customer accounts and assessing the risk of loss based on insolvency, disputes or other collection issues. In addition, the Company routinely analyzes the different receivable aging categories and establishes reserves based on a combination of past due receivables and expected future losses based primarily on its historical levels of bad debt losses. If the financial condition of a significant customer deteriorates resulting in its inability to pay its accounts when due, or if the Company’s overall loss history changes significantly, an adjustment in the Company’s allowance for doubtful accounts would be required, which could materially affect operating results. 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, with a small number of products having a warranty ranging up to ten years or more. 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. For warranties ten years or greater, including lifetime warranties, the Company uses the estimated useful life of the product to calculate the warranty exposure. 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 and could differ significantly from the estimates. Litigation and Other Contingencies 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. 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. See Note 16, Legal Proceedings, for additional disclosures related to the Company’s litigation. Advertising Expense Advertising costs are expensed as incurred and amounted to $107 million, $112 million and $89 million in 2019, 2018 and 2017, respectively. These expenses are included in Selling, general and administrative (“SG&A”) in the Consolidated Statements of Operations. Research and Development Expense Research and development (“R&D”) expenditures are expensed as incurred. Income Taxes The Company accounts for income taxes under the asset and liability method, which provides that deferred tax assets and liabilities be recognized for temporary differences between the financial reporting basis and the tax basis of assets and liabilities and expected benefits of utilizing net operating loss (“NOL”) and tax credit carryforwards. The Company records a valuation allowance when it is more likely than not that the deferred tax assets will not be realized. Each quarter, the Company evaluates the need for a valuation allowance for its deferred tax assets and adjusts the valuation allowance so that the Company records net deferred tax assets only to the extent that it has concluded it is more likely than not that these deferred tax assets will be realized. The Company accounts for interest and penalties related to income taxes as a component of the provision for income taxes. The Company recognizes liabilities for uncertain tax positions based on a two-step process. To the extent a tax position does not meet a more-likely-than-not level of certainty, no benefit is recognized in the financial statements. If a position meets the more-likely-than-not level of certainty, it is recognized in the financial statements at the largest amount that has a greater than 50% likelihood of being realized upon ultimate settlement. Interest and penalties related to unrecognized tax benefits are recognized in liabilities recorded for uncertain tax positions and are recorded in the provision for income taxes. The actual liability for unrealized tax benefits in any such contingency may be materially different from the Company’s estimates, which could result in the need to record additional liabilities for unrecognized tax benefits or potentially adjust previously-recorded liabilities for unrealized tax benefits, and may materially affect the Company’s operating results. 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, restricted stock unit awards (“RSUs”), performance-based restricted stock unit awards (“PSUs”), rights to purchase shares of common stock under the Company’s Employee Stock Purchase Plan (“ESPP”) and shares issuable in connection with convertible debt. Stock-based Compensation The Company accounts for all stock-based compensation at fair value. Stock-based compensation cost is measured at the grant date based on the value of the award and is recognized as expense over the vesting period. The fair values of all stock options granted are estimated using a binomial option-pricing model, and the fair values of all ESPP purchase rights are estimated using the Black-Scholes-Merton option-pricing model. Both the binomial and the Black-Scholes-Merton option-pricing models require the input of highly subjective assumptions. PSUs are granted to certain employees and vest only after the achievement of pre-determined performance metrics. Once the performance metrics are met, vesting of PSUs is subject to continued service by the employee. At the end of each reporting period, the Company evaluates the probability that PSUs will be earned. The Company records stock-based compensation expense based on the probability that the performance metrics will be achieved over the vesting period. 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 Company’s other comprehensive income (loss), net of tax is comprised of unrealized gains or losses on foreign exchange contracts and interest rate swap agreements designated as cash flow hedges, available-for-sale securities, foreign currency translation, and actuarial gains or losses related to pensions. Derivative Contracts The majority of the Company’s transactions are in U.S. dollars; however, some transactions are based in various foreign currencies. The Company purchases 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. Substantially all of 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. The Company had foreign exchange contracts with commercial banks for British pound sterling, European euro, Japanese yen, Malaysian ringgit, Philippine peso, Singapore dollar and Thai baht, which had an aggregate notional amount of $5.71 billion and $4.37 billion at June 28, 2019 and June 29, 2018, respectively. 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 are reported in cost of revenue and operating expenses, and presented within cash flows from operating activities. The Company accounts for its interest rate swaps as designated cash flow hedges to mitigate variations in interest payments under a portion of its LIBOR-based term loans due to variations in the LIBOR index. The Company pays interest monthly at a fixed rate and receives interest monthly at the LIBOR rate on the notional amount of the contract with realized gains or losses recognized in interest expense. 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 Consolidated Financial Statements for all years presented. A change in the fair value of undesignated hedges is recognized in earnings in the period incurred and is reported in Other income (expense), net. Pensions and Other Post-Retirement Benefit Plans The Company has defined benefit pension plans and other post-retirement plans covering certain employees in various countries. The benefits are based on the employees’ years of service and compensation. The plans are funded in conformity with the funding requirements of applicable government authorities. The Company amortizes unrecognized actuarial gains and losses and prior service costs on a straight-line basis over the remaining estimated average service life of the participants. The measurement date for the plans is the Company’s fiscal year-end. The Company recognizes the funded status of its defined benefit pension and post-retirement plans in the Consolidated Balance Sheets, with actuarial changes in the funded status recognized through accumulated other comprehensive income (loss) in the year in which such changes occur. In March 2017, the FASB issued ASU No. 2017-07, “Compensation-Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost” (“ASU 2017-07”). ASU 2017-07 requires that the Company report the service cost component in the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period with application applied retrospectively. In addition, the other components of net benefit cost are now presented prospectively in Other income (expense), net in the Consolidated Statements of Operations. The Company adopted this standard effective June 30, 2018. The adoption of this standard did not have a material impact on the Company’s Consolidated Financial Statements.

Recently Accounting Pronouncements	12 Months Ended
Recently Accounting Pronouncements	Jun. 28, 2019
Accounting Changes and Error Corrections [Abstract]
Recent Accounting Pronouncements	Recent Accounting Pronouncements Accounting Pronouncements Recently Adopted On August 29, 2018, the FASB issued ASU No. 2018-15, “Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract” (“ASU 2018-15”), to reduce diversity in practice in accounting for the costs of implementing cloud computing arrangements that are service contracts. ASU 2018-15 allows entities to apply the guidance in the FASB ASC 350-40 to determine which implementation costs are eligible to be capitalized as assets in a cloud computing arrangement that is considered a service contract. The Company adopted this standard on a prospective basis effective June 30, 2018, the beginning of fiscal year 2019, as allowed by the standard. The adoption of this standard and the costs capitalized for the year ended June 28, 2019 were not material to the Company’s Consolidated Financial Statements. In February 2018, the FASB issued ASU No. 2018-02, “Income Statement-Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income” (“ASU 2018-02”). ASU 2018-02 allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act enacted on December 22, 2017 (the “2017 Act”). Consequently, the amendments eliminate the stranded tax effects resulting from the 2017 Act and will improve the usefulness of information reported to financial statement users. Because the amendments only relate to the reclassification of the income tax effects of the 2017 Act, the underlying guidance that requires that the effect of a change in tax laws or rates be included in income from continuing operations is not affected. For tax effects that are unrelated to the 2017 Act, the Company’s policy to release these from Accumulated other comprehensive loss on an individual item basis rather than a portfolio basis remains unchanged. The Company early adopted this standard effective June 30, 2018 and elected to reclassify stranded tax effects resulting from the 2017 Act from Accumulated other comprehensive loss to Retained earnings. The adoption of this standard did not have a material impact on the Company’s Consolidated Financial Statements. In August 2017, the FASB issued ASU No. 2017-12, “Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities” (“ASU 2017-12”). ASU 2017-12 simplifies hedge accounting through changes to both designation and measurement requirements. For hedges that qualify as highly effective, the new standard eliminates the requirement to separately measure and record hedge ineffectiveness with the entire change in fair value of designated hedge reported in the results of operations in the same line item as the hedged item. The Company early adopted this standard effective June 30, 2018, using the modified retrospective approach. The adoption of this standard did not have a material impact on the Company’s Consolidated Financial Statements. In May 2017, the FASB issued ASU No. 2017-09, “Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting” (“ASU 2017-09”). ASU 2017-09 provides clarification when a change to the terms or conditions of a share-based payment award must be accounted for as a modification. The new guidance requires modification accounting if the fair value, vesting condition or the classification of the award is not the same immediately before and after a change to the terms and conditions of the award. The Company adopted this standard on a prospective basis effective June 30, 2018. The adoption of this standard did not have a material impact on the Company’s Consolidated Financial Statements. In January 2017, the FASB issued ASU No. 2017-01, “Business Combinations (Topic 805): Clarifying the Definition of a Business” (“ASU 2017-01”). ASU 2017-01 narrows the definition of a “business.” This standard provides guidance to assist entities with evaluating when a set of transferred assets and activities is a business. The Company adopted this standard effective June 30, 2018 and will apply it prospectively to transactions occurring thereafter. The adoption of this standard did not have a material impact on the Company’s Consolidated Financial Statements. In October 2016, the FASB issued ASU No. 2016-16, “Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory” (“ASU 2016-16”). ASU 2016-16 removes the prohibition in the FASB ASC Topic 740 against the immediate recognition of the current and deferred income tax effects of intra-entity transfers of assets other than inventory. The new standard is intended to reduce the complexity and diversity in practice related to the tax consequences of certain types of intra-entity asset transfers, particularly those involving intellectual property (“IP”). The Company adopted this standard effective June 30, 2018. The adoption of this standard did not have a material impact on the Company’s Consolidated Financial Statements. Recently Issued Accounting Pronouncements Not Yet Adopted In November 2018, the FASB issued ASU No. 2018-18, “Collaborative Arrangements (Topic 808): Clarifying the Interaction between Topic 808 and Topic 606” (“ASU 2018-18”). ASU 2018-18 clarifies that certain transactions between collaborative arrangement participants should be accounted for as revenue when the collaborative arrangement participant is a customer in the context of a unit of account and precludes recognizing as revenue consideration received from a collaborative arrangement participant if the participant is not a customer. This ASU requires retrospective adoption to the date the Company adopted ASC 606 by recognizing a cumulative-effect adjustment to the opening balance of retained earnings of the earliest annual period presented. The amendments are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, which for the Company is the first quarter of fiscal 2021. The Company does not expect this update to have a material impact on its Consolidated Financial Statements. In October 2018, the FASB issued ASU No. 2018-16, “Derivatives and Hedging (Topic 815): Inclusion of the Secured Overnight Financing Rate (SOFR) Overnight Index Swap (OIS) Rate as a Benchmark Interest Rate for Hedge Accounting Purposes” (“ASU 2018-16”). ASU 2018-16 allows for the use of the OIS rate based on the SOFR as a U.S. benchmark interest rate for hedge accounting purposes under Topic 815, Derivatives and Hedging. For public entities who have adopted ASU 2017-12, the amendments are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018, which for the Company is the first quarter of fiscal 2020. The Company does not expect this update to have a material impact on its Consolidated Financial Statements. In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”). ASU 2016-13 seeks to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments, including trade receivables, and other commitments to extend credit held by a reporting entity at each reporting date. The amendments require an entity to replace the incurred loss impairment methodology in current U.S. GAAP with a methodology that reflects current expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The amendments are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, which for the Company is the first quarter of fiscal 2021. The Company is currently evaluating the impact this update will have on its Consolidated Financial Statements. In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842)” (“ASU 2016-02”). ASU 2016-02 supersedes ASC 840 “Leases”. The amendments in this update require, among other things, that lessees recognize the following for all leases (unless a policy election is made by class of underlying asset to exclude short-term leases) at the commencement date: (1) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and (2) a right-of-use asset, which is an asset that represents the lessee’s right to use, or the direct use of, a specified asset for the lease term. The FASB issued ASU 2018-11 on July 30, 2018, which allows entities to apply the provisions of ASC 842 at the effective date without adjusting comparative periods. The standard is effective for interim and annual reporting periods beginning after December 15, 2018 and provides a package of practical expedients to simplify transition. The Company will adopt this standard in the first quarter of fiscal 2020 and will elect the transition method provided in ASU 2018-11 to apply Topic 842 as of the date of adoption without adjusting comparative periods. The Company will elect the package of practical expedients and will not reassess prior conclusions including (a) whether its contracts are or contain a lease, (b) lease classification and (c) capitalization of initial direct costs. The Company currently expects the adoption of Topic 842 to result in an increase in lease assets and a corresponding increase in lease liabilities on our Consolidated Balance Sheet of approximately $220 million to $240 million. Upon adoption, the Company will provide expanded financial statement disclosures related to leases.

Supplemental Financial Statement Data

12 Months Ended

Jun. 28, 2019

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Supplemental Financial Statement Data

Accounts receivable, net

From time to time, in connection with factoring agreements, the Company sells trade accounts receivable without recourse to third party purchasers in exchange for cash. During 2019 and 2018, the Company sold trade accounts receivable and received cash proceeds of $1.02 billion and $57 million, respectively. The discounts on the trade accounts receivable sold during the periods were not material and were recorded within Other income (expense), net in the Consolidated Financial Statements. As of June 28, 2019 and June 29, 2018, the amount of factored receivables that remained outstanding was $318 million and $57 million, respectively.

Inventories



	June 28, 2019		June 29, 2018
	(in millions)
Inventories:
Raw materials and component parts	$	1,142	$	1,048
Work-in-process	968		878
Finished goods	1,173		1,018
Total inventories	$	3,283	$	2,944

Property, plant and equipment, net



	June 28, 2019			June 29, 2018
	(in millions)
Property, plant, and equipment:
Land	$	294		$	306
Buildings and improvements	1,743			1,949
Machinery and equipment	7,267			7,209
Computer equipment and software	441			440
Furniture and fixtures	56			48
Construction-in-process	202			234
Property, plant and equipment, gross	10,003			10,186
Accumulated depreciation	(7,160		)	(7,091		)
Property, plant, and equipment, net	$	2,843		$	3,095

Depreciation expense of property, plant and equipment totaled $844 million, $871 million and $960 million in 2019, 2018 and 2017, respectively.

Product warranty liability

Changes in the warranty accrual were as follows:



	2019			2018			2017
	(in millions)
Warranty accrual, beginning of period	$	318		$	311		$	279
Charges to operations	162			176			177
Utilization	(142		)	(151		)	(151		)
Changes in estimate related to pre-existing warranties	12			(18		)	6
Warranty accrual, end of period	$	350		$	318		$	311

The current portion of the warranty accrual is classified in Accrued expenses and the long-term portion is classified in Other liabilities as noted below:



	2019		2018
	(in millions)
Warranty accrual
Current portion	$	188	$	168
Long-term portion	162		150
Total warranty accrual	$	350	$	318

Other liabilities



	2019		2018
	(in millions)
Other non-current liabilities:
Non-current net tax payable	$	928	$	1,315
Payables related to unrecognized tax benefits	699		508
Other non-current liabilities	713		432
Total other non-current liabilities	$	2,340	$	2,255

Accumulated other comprehensive income (loss)

Other comprehensive income (loss) (“OCI”), net of tax refers to expenses, gains and losses that are recorded as an element of shareholders’ equity but are excluded from net income. The following table illustrates the changes in the balances of each component of Accumulated other comprehensive income (loss) (“AOCI”):



	Actuarial Pension Gains (Losses)			Foreign Currency Translation Adjustment			Unrealized Gains (Losses) on Derivative Contracts and available-for-sale securities			Total Accumulated Comprehensive Income (Loss)
	(in millions)
Balance at July 1, 2017	$	(18	)	$	(39	)	$	(1	)	$	(58	)
Other comprehensive income (loss) before reclassifications	(2		)	18			25			41
Amounts reclassified from accumulated other comprehensive income (loss)	—			—			(18		)	(18		)
Income tax benefit (expense) related to items of other comprehensive income (loss)	1			—			(5		)	(4		)
Net current-period other comprehensive income (loss)	(1		)	18			2			19
Balance at June 29, 2018	(19		)	(21		)	1			(39		)
Other comprehensive income (loss) before reclassifications	(39		)	28			(48		)	(59		)
Amounts reclassified from accumulated other comprehensive income (loss)	—			—			9			9
Income tax benefit (expense) related to items of other comprehensive income (loss)	5			(3		)	19			21
Net current-period other comprehensive loss	(34		)	25			(20		)	(29		)
Balance at June 28, 2019	$	(53	)	$	4		$	(19	)	$	(68	)

During 2019, 2018 and 2017, the amounts reclassified out of AOCI related to derivative contracts were not material and substantially all were charged to Cost of revenue in the Consolidated Statements of Operations.

Fair Value Measurements and Investments

12 Months Ended

Jun. 28, 2019

Fair Value Disclosures [Abstract]

Fair Value Measurements and Investments

The Company’s total cash, cash equivalents and available-for-sale securities was as follows:



	June 28, 2019		June 29, 2018
	(in millions)
Cash and cash equivalents	$	3,455	$	5,005
Short-term available-for-sale securities (included within Other current assets)	—		23
Long-term available-for-sale securities (included within Other non-current assets)	—		93
Total cash, cash equivalents and available-for-sale securities	$	3,455	$	5,121

Financial Instruments Carried at Fair Value

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


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


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


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

The following tables present information about the Company’s financial assets and liabilities that are measured at fair value on a recurring basis as of June 28, 2019 and June 29, 2018, and indicate the fair value hierarchy of the valuation techniques utilized to determine such values:



	June 28, 2019
	Level 1		Level 2		Level 3		Total
	(in millions)
Assets:
Cash equivalents:
Money market funds	$	1,388	$	—	$	—	$	1,388
Certificates of deposit	—		17		—		17
Total cash equivalents	1,388		17		—		1,405
Foreign exchange contracts	—		44		—		44
Interest rate swap contracts	—		2		—		2
Total assets at fair value	$	1,388	$	63	$	—	$	1,451
Liabilities:
Foreign exchange contracts	$	—	$	40	$	—	$	40
Interest rate swap contract	—		65		—		65
Total liabilities at fair value	$	—	$	105	$	—	$	105



	June 29, 2018
	Level 1		Level 2		Level 3		Total
	(in millions)
Assets:
Cash equivalents:
Money market funds	$	2,554	$	—	$	—	$	2,554
Certificates of deposit	—		4		—		4
Total cash equivalents	2,554		4		—		2,558
Short-term available-for-sale securities:
U.S. Treasury securities	3		—		—		3
Corporate notes and bonds	—		12		—		12
Asset-backed securities	—		4		—		4
Municipal notes and bonds	—		2		—		2
Equity securities	2		—		—		2
Total short-term available-for-sale securities	5		18		—		23
Long-term available-for-sale securities:
U.S. Treasury securities	3		—		—		3
U.S. Government agency securities	—		5		—		5
International government securities	—		1		—		1
Corporate notes and bonds	—		65		—		65
Asset-backed securities	—		8		—		8
Municipal notes and bonds	—		11		—		11
Total long-term available-for-sale securities	3		90		—		93
Foreign exchange contracts	—		51		—		51
Interest rate swap contracts	—		16		—		16
Total assets at fair value	$	2,562	$	179	$	—	$	2,741
Liabilities:
Foreign exchange contracts	$	—	$	28	$	—	$	28

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.

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. 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 5, Derivative Instruments and Hedging Activities. Derivative assets and liabilities are reflected in the Company’s Consolidated Balance Sheet under Other current assets and Accrued expenses, respectively.

Interest Rate Swaps. The Company’s interest rate swaps are long-term contracts to hedge the Company’s variable rate debt risk. Interest rate swaps are valued based on estimated present value of future cash flows model. The market-based observable inputs for the model include interest rate curves and credit valuation adjustments.

During 2019 and 2018, the Company had no transfers of financial assets and liabilities between levels.

Available-for-Sale Securities

The Company sold substantially all of its available-for-sale securities during fiscal 2019. The cost basis of the Company’s investments classified as available-for-sale securities, individually and in the aggregate, approximated its fair value as of June 29, 2018.

Financial Instruments Not Carried at Fair Value

The carrying value of the Company’s revolving credit facility approximates its fair value given the revolving nature of the balance and the variable market interest rate. For financial instruments where the carrying value (which includes principal adjusted for any unamortized issuance costs, and discounts or premiums) differs from fair value (which is based on quoted market prices), the following table represents the related carrying value and fair value for each of the Company’s outstanding financial instruments. Each of the financial instruments presented below was categorized as Level 2 for all periods presented, based on the frequency of trading immediately prior to the end of the fourth quarter of 2019 and the fourth quarter of 2018, respectively.



	June 28, 2019				June 29, 2018
	Carrying Value		Fair Value		Carrying Value		Fair Value
	(in millions)
0.50% convertible senior notes due 2020	$	33	$	31	$	31	$	34
Variable interest rate Term Loan A-1 maturing 2023	4,824		4,780		4,982		5,013
Variable interest rate U.S. Term Loan B-4 maturing 2023	2,424		2,370		2,448		2,452
1.50% convertible notes due 2024	958		986		931		1,114
4.750% senior unsecured notes due 2026	2,283		2,263		2,280		2,238
Total	$	10,522	$	10,430	$	10,672	$	10,851

- 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

Derivatives Instruments and Hedging Activities	12 Months Ended
Derivatives Instruments and Hedging Activities	Jun. 28, 2019
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Derivative Instruments and Hedging Activities	Derivative Instruments and Hedging Activities As of June 28, 2019, the Company had outstanding foreign exchange forward contracts that were designated as either cash flow hedges or non-designated hedges. Substantially all of the contract maturity dates of these foreign exchange forward contracts do not exceed 12 months. In addition, the Company had outstanding pay-fixed interest rate swaps that were designated as cash flow hedges of variable rate interest payments on a portion of its term loans through February 2023. As of June 28, 2019, the amount of existing net losses related to cash flow hedges recorded in AOCI included $54 million related to its interest rate swaps that is expected to be reclassified to earnings after twelve months. In addition, as of June 28, 2019, the Company did not have any foreign exchange forward contracts with credit-risk-related contingent features. Changes in fair values of the non-designated foreign exchange contracts are recognized in Other income (expense), net and are largely offset by corresponding changes in the fair values of the foreign currency denominated monetary assets and liabilities. During 2019, 2018 and 2017, total net realized and unrealized transaction and foreign exchange contract currency gains and losses were not material to the Company’s Consolidated Financial Statements. See Note 4, Fair Value Measurements and Investments, for additional disclosures related to the fair value of the Company’s derivative contracts. Netting Arrangements Under certain provisions and conditions within agreements with counterparties to the Company’s foreign exchange forward contracts, subject to applicable requirements, the Company has the right of offset associated with the Company’s foreign exchange forward contracts and is allowed to net settle transactions of the same currency with a single net amount payable by one party to the other. As of June 28, 2019 and June 29, 2018, the effect of rights of offset was not material and the Company did not offset or net the fair value amounts of derivative instruments in its Consolidated Balance Sheets.

Debt

12 Months Ended

Jun. 28, 2019

Debt Disclosure [Abstract]

Debt

Debt consisted of the following as of June 28, 2019 and June 29, 2018:



	June 28, 2019			June 29, 2018
	(in millions)
0.50% convertible senior notes due 2020	$	35		$	35
Revolving credit facility maturing 2023	—			500
Variable interest rate Term Loan A-1 maturing 2023	4,834			4,991
Variable interest rate U.S. Term Loan B-4 maturing 2023	2,425			2,449
1.50% convertible notes due 2024	1,100			1,100
4.750% senior unsecured notes due 2026	2,300			2,300
Total debt	10,694			11,375
Issuance costs and debt discounts	(172		)	(203		)
Subtotal	10,522			11,172
Less current portion of long-term debt	(276		)	(179		)
Long-term debt	$	10,246		$	10,993

The Company has a credit agreement originally entered into on April 29, 2016 and most recently amended in April 2019 (as amended, the “Credit Agreement”), that provides for, among other things, (i) a $2.25 billion revolving credit facility maturing in 2023 (the “Revolving Facility”), (ii) a term loan A-1 due 2023 (the “Term Loan A-1”), and (iii) a term loan B-4 due April 29, 2023 (the “Term Loan B-4”).

Borrowings under the revolving credit facility bear interest at a rate equal to, at the Company’s option, either an adjusted London Interbank Offered Rate (“LIBOR”) rate, subject to a 0.00% floor, plus an applicable margin varying from 1.125% to 2.000% or a base rate plus an applicable margin varying from 0.125% to 1.000%, in each case depending on the Company’s corporate credit ratings. During 2018, the Company repaid the previously outstanding borrowings under its revolving credit facility. At June 28, 2019, the Company’s borrowing capacity under the revolving credit facility was $2.25 billion.

The Term Loan A-1 bears interest at a rate equal to, at the Company’s option, either an adjusted London Interbank Offered Rate (“LIBOR”) rate, subject to a 0.00% floor, plus an applicable margin varying from 1.125% to 2.000% or a base rate plus an applicable margin varying from 0.125% to 1.000%, in each case depending on the Company’s corporate credit ratings. Currently the Company has selected the LIBOR rate option, and the applicable rate was 3.90% as of June 28, 2019. Principal payments are due in quarterly installments of 1.250% per quarter through December 2022, with the remaining balance payable on February 27, 2023. The Term Loan A-1 issuance costs are amortized to interest expense over the term of the loan, and as of June 28, 2019, issuance costs of $10 million remained unamortized.

The U.S. Term Loan B-4 bears interest at a rate equal to, at the Company’s option, either an adjusted LIBOR rate, subject to a 0.00% floor, plus 1.75% or a base rate plus 0.75%. Currently the Company has selected the LIBOR rate option, and the applicable interest rate was 4.15% as of June 28, 2019. Principal payments on U.S. Term Loan B-4 of 0.25% are due quarterly with the balance due on April 29, 2023. The U.S. Term Loan B-4 issuance costs are amortized to interest expense over the term of the loan and as of June 28, 2019, issuance costs of $1 million remained unamortized.

In February 2018, the Company issued $1.10 billion aggregate principal amount of convertible senior notes due February 1, 2024 (the “2024 Convertible Notes”). The 2024 Convertible Notes bear interest at an annual rate of 1.50% with interest payable on February 1 and August 1 of each year. The Company is not required to make principal payments on the 2024 Convertible Notes prior to the maturity date. The 2024 Convertible Notes are jointly and severally guaranteed by certain material domestic subsidiaries of the Company.

The 2024 Convertible Notes are convertible into cash, shares of the Company’s common stock, or a combination thereof at an initial conversion price of approximately $121.91 per share of common stock. Holders of the 2024 Convertible Notes may freely convert their 2024 Convertible Notes on or after November 1, 2023 until the close of business on the business day immediately preceding the maturity date. Prior to November 1, 2023, holders may convert their 2024 Convertible Notes based on variations in market price of the Company’s common stock in relation to the conversion price or the trading price of the 2024 Convertible Notes or upon the occurrence of specified corporate events. On or after February 5, 2021, the Company may redeem all or part of the 2024 Convertible Notes, at its option, if the market price of the Company’s stock achieves certain levels.

The Company separately accounts for the liability and equity components of the 2024 Convertible Notes. The value of the liability component as of the date of issuance was recognized at the present value of its cash flows using a discount rate of 4.375%, the Company’s borrowing rate at the date of the issuance for a similar debt instrument without the conversion feature, resulting in a debt discount of $165 million, which was allocated to equity as the value of the conversion feature. The 2024 Convertible Notes debt issuance costs were approximately $18 million, of which $15 million was allocated to the debt component and $3 million was allocated to equity. The debt discount and issuance costs are amortized to interest expense over the term of the 2024 Convertible Notes. As of June 28, 2019, debt discount and issuance cost of $142 million remained unamortized.

In February 2018, the Company issued $2.30 billion aggregate principal amount of senior unsecured notes due February 15, 2026 (the “2026 Senior Unsecured Notes”). The 2026 Senior Unsecured Notes bear interest at an annual rate of 4.750% with interest payable on February 15 and August 15 of each year. The Company is not required to make principal payments on the 2026 Senior Unsecured Notes prior to the maturity date. The 2026 Senior Unsecured Notes are jointly and severally guaranteed by certain material domestic subsidiaries of the Company. The 2026 Senior Unsecured Notes issuance costs are amortized to interest expense over the term of the 2026 Senior Unsecured Notes and as of June 28, 2019, issuance costs of $17 million remained unamortized.

The Company assumed the 0.5% convertible senior notes due November 15, 2020 (the “2020 Convertible Notes”) in connection with its acquisition of SanDisk Corporation (“SanDisk”), pursuant to an Agreement and Plan of Merger (the “Merger”), on May 12, 2016 (the “SanDisk Closing Date”). As of June 28, 2019, $35 million principal amount of the 2020 Convertible Notes was outstanding and had a conversion rate of 10.9006 units of reference property per $1,000 principal amount of the 2020 Convertible Notes, corresponding to 2.6020 shares of the Company’s common stock and $735.79 of cash, subject to adjustments under the indenture. The 2020 Convertible Notes are not currently exchangeable into reference property. The 2020 Convertible Notes issuance costs are amortized to interest expense over the term of the 2020 Convertible Notes and as of June 28, 2019, issuance costs of $2 million remained unamortized.

The Revolving Facility, Term Loan A-1 and Term Loan B-4 are unconditionally guaranteed by each of the guarantors under the Credit Agreement and are secured on a first-priority basis (subject to permitted liens) by a lien on the same collateral that secure the other loans under the Credit Agreement; provided that the security and guarantees will be automatically suspended upon certain conditions.

The Credit Agreement requires the Company to comply with certain financial covenants with respect to the Revolving Facility and Term Loan A-1, consisting of a Leverage Ratio and an Interest Coverage Ratio (each as defined below). These covenants are based upon a trailing twelve-month consolidated adjusted EBITDA as defined in the Credit Agreement (“Adjusted EBITDA”). Adjusted EBITDA is defined as net income (loss) plus interest expense, income tax expense (benefit) and depreciation and amortization as well as other contractual adjustments as provided for in the Credit Agreement.

In April 2019, the Company amended the Credit Agreement for the purposes of providing additional flexibility by adjusting the leverage ratio maintenance covenant levels applicable to the Term Loan A-1 and Revolving Facility thereunder and amending the definition of Consolidated Adjusted EBITDA under the financial maintenance covenants to include an addback for certain depreciation related payments with respect to the Company’s Flash Ventures. As amended, the Company is now required to maintain a maximum ratio of total funded debt to trailing twelve-month Adjusted EBITDA (“Leverage Ratio”) at the end of each quarter of 4.25 to 1.00 through the quarter ending October 2, 2020, 4.00 to 1.00 through the quarter ending July 2, 2021, 3.75 to 1.00 through the quarter ending December 31, 2021, 3.50 to 1.00 through the quarter ending July 1, 2022, and 3.25 to 1.00 thereafter. In addition, the Company is required to maintain a minimum ratio of Adjusted EBITDA to interest expense (“Interest Coverage Ratio”), both calculated on a trailing twelve-month basis, at the end of each quarter of 3.50 to 1.00. As of June 28, 2019, the Company was in compliance with all financial covenants under the Credit Agreement.

The Credit Agreement also requires the Company and its subsidiaries to comply with customary covenants that include, among others, limitations on the incurrence of additional debt, liens on property, acquisitions and investments, loans and guarantees, mergers, consolidations, liquidations and dissolutions, asset sales, dividends and other payments in respect of the Company’s capital stock, prepayments of certain debt, transactions with affiliates and certain modifications of organizational documents and certain debt agreements. In addition, the indentures governing the Company’s 2026 Senior Unsecured Notes and the 2024 Convertible Notes contain restrictive covenants that limit the Company’s and its subsidiaries’ ability to, among other things, consolidate, merge or sell all or substantially all of their assets; create liens; and incur, assume or guarantee additional indebtedness.

Future Debt Payments

As of June 28, 2019, annual future debt payments were as follows:



	Future Debt Payments
	(in millions)
Fiscal year
2020	$	276
2021	311
2022	276
2023	6,431
2024	1,100
2025 and thereafter	2,300
Total debt maturities	10,694
Issuance costs and debt discounts	(172		)
Net carrying value	$	10,522

Goodwill and Other Intangible Assets

12 Months Ended

Jun. 28, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangible Assets

The following table summarizes the activity related to the carrying amount of goodwill:



	Carrying Amount
	(in millions)
Balance at June 30, 2017	$	10,014
Goodwill recorded in connection with acquisitions	61
Balance at June 29, 2018	10,075
Foreign currency translation adjustment	1
Balance at June 28, 2019	$	10,076

The following tables present intangible assets as of June 28, 2019 and June 29, 2018:



	June 28, 2019
	Weighted Average Amortization Period	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
	(in years)	(in millions)
Finite:
Existing technology	3	$	4,332	$	(3,316	)	$	1,016
Trade names and trademarks	7	648		(310		)	338
Customer relationships	6	635		(372		)	263
Other	2	180		(180		)	—
Leasehold interests	31	29		(7		)	22
Total finite intangible assets		5,824		(4,185		)	1,639
In-process research and development		72		—			72
Total intangible assets		$	5,896	$	(4,185	)	$	1,711



	June 29, 2018
	Weighted Average Amortization Period	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
	(in years)	(in millions)
Finite:
Existing technology	3	$	4,323	$	(2,528	)	$	1,795
Trade names and trademarks	7	648		(222		)	426
Customer relationships	6	635		(299		)	336
Other	2	180		(161		)	19
Leasehold interests	31	32		(8		)	24
Total finite intangible assets		5,818		(3,218		)	2,600
In-process research and development		80		—			80
Total intangible assets		$	5,898	$	(3,218	)	$	2,680

As part of prior acquisitions, the Company recorded at the time of the acquisition acquired IPR&D for projects in progress that had not yet reached technological feasibility. IPR&D is initially accounted for as an indefinite-lived intangible asset. Once a project reaches technological feasibility, the Company reclassifies the balance to existing technology and begins to amortize the intangible asset over its estimated useful life. During 2019, the Company reclassified $8 million of acquired IPR&D to existing technology and commenced amortization over its estimated useful life of 2 years.

During 2019, 2018 and 2017, the Company did not record any impairment charges related to intangible assets.

Intangible assets are amortized over the estimated useful lives based on the pattern in which the economic benefits are expected to be received. Intangible asset amortization was as follows:



	2019		2018		2017
	(In millions)
Intangible asset amortization	$	968	$	1,185	$	1,169

The following table presents estimated future amortization expense for intangible assets currently subject to amortization as of June 28, 2019:



	Future Intangible Asset Amortization Expense
	(in millions)
Fiscal year
2020	$	758
2021	503
2022	226
2023	134
2024 and thereafter	18
Total future amortization expense	$	1,639

Pensions and Other Post-retirement Benefit Plans

12 Months Ended

Jun. 28, 2019

Retirement Benefits [Abstract]

Pensions and Other Post-retirement Benefit Plans

Pension and Other Post-Retirement Benefit Plans

The Company has pension and other post-retirement benefit plans in various countries. The Company’s principal pension plans are in Japan. All pension and other post-retirement benefit plans outside of the Company’s Japanese defined benefit pension plan (the “Japanese Plan”) are immaterial to the Consolidated Financial Statements.

Obligations and Funded Status

The following table presents the unfunded status of the benefit obligations for the Japanese Plan:



	2019			2018			2017
	(in millions)
Change in benefit obligation:
Projected benefit obligation at beginning of period	$	260		$	249		$	326
Service cost	6			6			8
Interest cost	2			2			1
Actuarial loss (gain)	13			9			(22		)
Benefits paid	(9		)	(9		)	(30		)
Settlement/Curtailment	—			—			(6		)
Non-U.S. currency movement	8			3			(28		)
Projected benefit obligation at end of period	280			260			249
Change in plan assets:
Fair value of plan assets at beginning of period	200			189			212
Actual return on plan assets	2			8			15
Employer contributions	10			10			10
Benefits paid	(9		)	(9		)	(30		)
Non-U.S. currency movement	5			2			(18		)
Fair value of plan assets at end of period	208			200			189
Unfunded status	$	72		$	60		$	60

The following table presents the unfunded amounts related to the Japanese Plan as recognized on the Company’s Consolidated Balance Sheets:



	June 28, 2019		June 29, 2018
	(in millions)
Current liabilities	$	1	$	1
Non-current liabilities	71		59
Net amount recognized	$	72	$	60

The accumulated benefit obligation for the Japanese defined benefit pension plans was $280 million at June 28, 2019. As of June 28, 2019, actuarial losses for the Japanese defined benefit pension plans of $35 million are included in Accumulated other comprehensive loss in the Consolidated Balance Sheet. There were no prior service credits for the defined benefit pension plans recognized in Accumulated other comprehensive loss in the Consolidated Balance Sheet as of June 28, 2019.

Net periodic benefit costs were not material for 2019, 2018, and 2017.

Assumptions

Weighted-Average Assumptions

The weighted-average actuarial assumptions used to determine the projected benefit obligations for the Japanese defined benefit pension plans were as follows:



	2019		2018		2017
Discount rate	0.4	%	0.7	%	0.8	%
Rate of compensation increase	0.6	%	0.7	%	0.8	%

The weighted-average actuarial assumptions used to determine benefit costs for the Japanese defined benefit pension plans were as follows:



	2019		2018		2017
Discount rate	0.7	%	0.8	%	0.4	%
Expected long-term rate of return on plan assets	2.5	%	2.5	%	2.5	%
Rate of compensation increase	0.7	%	0.8	%	0.8	%

The Company develops a discount rate by calculating when the estimated benefit payments will be due. Management in Japan then matches the benefit payments to bond ratings that are “AA” or higher which match the timing of the expected benefit payments to determine the appropriate discount rate.

The Company develops the expected long-term rate of return on plan assets by analyzing rates of return in Japan as well as the investment portfolio applicable to the plan. The Company’s estimates of future rates of return on assets is based in large part on the projected rate of return from the respective investment managers using a long-term view of historical returns, as well as actuarial recommendations using the most current generational and mortality tables and rates.

The Company develops the rate of compensation increase assumptions using local compensation practices and historical rates of increases.

Plan Assets

Investment Policies and Strategies

The investment policy in Japan is to generate a stable return on investments over a long-term horizon in order to have adequate pension funds to meet the Company’s future obligations. In order to achieve this investment goal, a diversified portfolio with target asset allocation and expected rate of return is established by considering factors such as composition of participants, level of funded status, capacity to absorb risks and the current economic environment. The target asset allocation is 62% in debt securities, 35% in equity securities, and the remaining 3% in other assets. Risk management is accomplished through diversification, periodic review of plan asset performance and appropriate realignment of asset allocation. Assumptions regarding the expected long-term rate of return on plan assets are periodically reviewed and are based on the historical trend of returns, the risk and correlation of each asset and the latest economic environment.

The expected long-term rate of return is estimated based on many factors, including expected forecast for inflation, risk premiums for each asset class, expected asset allocation, current and future financial market conditions and diversification and rebalancing strategies. Historical return patterns and correlations, consensus return forecasts and other relevant financial factors are analyzed periodically by the investment advisor so as to ensure that the expected long-term rate of return is reasonable and appropriate.

Fair Value Measurements

The following tables present the Japanese defined benefit pension plans’ major asset categories and their associated fair values as of June 28, 2019 and June 29, 2018:



	June 28, 2019
	Level 1		Level 2		Level 3		Total
	(in millions)
Equity:
Equity commingled/mutual funds⁽¹⁾⁽²⁾	$	—	$	68	$	—	$	68
Fixed income:
Fixed income commingled/mutual funds⁽¹⁾⁽³⁾	—		131		—