10-Q 1 stx-20220401.htm 10-Q stx-20220401
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
____________________________ 
FORM 10-Q
___________________________ 
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended April 1, 2022
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from:                to                
Commission File Number 001-31560
 _______________________________________
SEAGATE TECHNOLOGY HOLDINGS PUBLIC LIMITED COMPANY
(Exact name of registrant as specified in its charter)
 _______________________________________
Ireland 98-1597419
(State or other jurisdiction of(I.R.S. Employer
incorporation or organization) Identification Number)
38/39 Fitzwilliam Square
Dublin 2, Ireland
(Address of principal executive offices)
D02 NX53
(Zip Code)
 
Telephone: (353) (1) 234-3136
(Registrant’s telephone number, including area code)
_______________________________________ 
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Ordinary Shares, par value $0.00001 per shareSTXThe NASDAQ Global Select Market
_______________________________________ 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer 
Non-accelerated filer Smaller reporting company 
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No
As of April 25, 2022, 214,843,969 of the registrant’s ordinary shares, par value $0.00001 per share, were issued and outstanding.




INDEX
SEAGATE TECHNOLOGY HOLDINGS PLC
   PAGE NO.
    
  
 
  
  
  
  
  
 
 
 
 
 
 
 
 
 
 
 
  

2

PART I
FINANCIAL INFORMATION

See Notes to Condensed Consolidated Financial Statements.
3


SEAGATE TECHNOLOGY HOLDINGS PLC
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions)
 April 1,
2022
July 2,
2021
(unaudited)
ASSETS  
Current assets:  
Cash and cash equivalents$1,138 $1,209 
Accounts receivable, net1,344 1,158 
Inventories1,479 1,204 
Other current assets298 208 
Total current assets4,259 3,779 
Property, equipment and leasehold improvements, net2,197 2,181 
Goodwill1,237 1,237 
Other intangible assets, net14 29 
Deferred income taxes1,121 1,117 
Other assets, net317 332 
Total Assets$9,145 $8,675 
LIABILITIES AND EQUITY  
Current liabilities:  
Accounts payable$1,948 $1,725 
Accrued employee compensation194 282 
Accrued warranty64 61 
Current portion of long-term debt30 245 
Accrued expenses645 608 
Total current liabilities2,881 2,921 
Long-term accrued warranty84 75 
Other non-current liabilities145 154 
Long-term debt, less current portion5,614 4,894 
Total Liabilities8,724 8,044 
Commitments and contingencies (See Notes 10, 12 and 13)
Shareholders’ Equity:
Ordinary shares and additional paid-in capital7,151 6,977 
Accumulated other comprehensive income (loss)37 (41)
Accumulated deficit(6,767)(6,305)
Total Equity421 631 
Total Liabilities and Equity$9,145 $8,675 




See Notes to Condensed Consolidated Financial Statements.
4


SEAGATE TECHNOLOGY HOLDINGS PLC
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per share data)
(Unaudited)
 For the Three Months EndedFor the Nine Months Ended
 April 1,
2022
April 2,
2021
April 1,
2022
April 2,
2021
Revenue$2,802 $2,731 $9,033 $7,668 
 
Cost of revenue1,996 1,991 6,323 5,636 
Product development233 227 694 671 
Marketing and administrative141 126 410 366 
Amortization of intangibles3 3 9 9 
Restructuring and other, net (2)2 1 
Total operating expenses2,373 2,345 7,438 6,683 
 
Income from operations429 386 1,595 985 
 
Interest income 1 1 2 
Interest expense(63)(59)(184)(161)
Other, net(15)11 (14)25 
Other expense, net(78)(47)(197)(134)
 
Income before income taxes351 339 1,398 851 
Provision for income taxes5 10 25 19 
Net income$346 $329 $1,373 $832 
 
Net income per share:
Basic$1.59 $1.41 $6.18 $3.38 
Diluted1.56 1.39 6.08 3.34 
Number of shares used in per share calculations:  
Basic218 233 222 246 
Diluted222 237 226 249 


See Notes to Condensed Consolidated Financial Statements.
5


SEAGATE TECHNOLOGY HOLDINGS PLC
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In millions)
(Unaudited)
 For the Three Months EndedFor the Nine Months Ended
 April 1,
2022
April 2,
2021
April 1,
2022
April 2,
2021
Net income$346 $329 $1,373 $832 
Other comprehensive income (loss), net of tax:
Change in net unrealized gains (losses) on cash flow hedges:
Net unrealized gains arising during the period56 4 58 20 
 Losses (gains) reclassified into earnings6 (7)18 (9)
Net change62 (3)76 11 
Change in unrealized components of post-retirement plans:
Net unrealized gains arising during the period 1 1  
Losses reclassified into earnings  1 2 
Net change 1 2 2 
Foreign currency translation adjustments   15 
Total other comprehensive income (loss), net of tax62 (2)78 28 
Comprehensive income $408 $327 $1,451 $860 

See Notes to Condensed Consolidated Financial Statements.
6


SEAGATE TECHNOLOGY HOLDINGS PLC
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)
 For the Nine Months Ended
 April 1,
2022
April 2,
2021
OPERATING ACTIVITIES  
Net income$1,373 $832 
Adjustments to reconcile net income to net cash provided by operating activities: 
Depreciation and amortization324 294 
Share-based compensation106 87 
Deferred income taxes2 (7)
Other non-cash operating activities, net46 (8)
Changes in operating assets and liabilities: 
Accounts receivable, net(186)138 
Inventories(275)(141)
Accounts payable209 60 
Accrued employee compensation(88)(46)
Accrued expenses, income taxes and warranty19  
Other assets and liabilities (53)(61)
Net cash provided by operating activities1,477 1,148 
INVESTING ACTIVITIES  
Acquisition of property, equipment and leasehold improvements(309)(374)
Proceeds from sale of investments34 11 
Proceeds from the sale of assets 4 
Purchases of investments(18)(4)
Maturities of short-term investments 3 
Net cash used in investing activities(293)(360)
FINANCING ACTIVITIES 
Redemption and repurchase of debt(701)(27)
Dividends to shareholders(458)(495)
Repurchases of ordinary shares(1,313)(1,819)
Taxes paid related to net share settlement of equity awards(45)(33)
Proceeds from issuance of long-term debt1,200 1,000 
Proceeds from issuance of ordinary shares under employee stock plans68 95 
Other financing activities, net(6)(19)
Net cash used in financing activities(1,255)(1,298)
Decrease in cash, cash equivalents and restricted cash(71)(510)
Cash, cash equivalents and restricted cash at the beginning of the period1,211 1,724 
Cash, cash equivalents and restricted cash at the end of the period$1,140 $1,214 

See Notes to Condensed Consolidated Financial Statements.
7


SEAGATE TECHNOLOGY HOLDINGS PLC
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY 
For the Three Months Ended April 1, 2022 and April 2, 2021
(In millions)
(Unaudited)
Number of Ordinary SharesPar Value of SharesAdditional Paid-in CapitalAccumulated Other Comprehensive Income (Loss)Accumulated DeficitTotal
Balance at December 31, 2021219 $ $7,084 $(25)$(6,533)$526 
Net income346 346 
Other comprehensive income62 62 
Issuance of ordinary shares under employee share plans1 31 31 
Repurchases of ordinary shares(4)(428)(428)
Dividends to shareholders ($0.70 per ordinary share)
(152)(152)
Share-based compensation36 36 
Balance at April 1, 2022216 $ $7,151 $37 $(6,767)$421 
 Number of Ordinary SharesPar Value of SharesAdditional Paid-in CapitalAccumulated Other Comprehensive Income (Loss)Accumulated DeficitTotal
Balance at January 1, 2021240 $ $6,855 $(36)$(5,829)$990 
Net income329 329 
Other comprehensive loss(2)(2)
Issuance of ordinary shares under employee share plans1 55 55 
Repurchases of ordinary shares(11)(762)(762)
Tax withholding related to vesting of restricted share units (1)(1)
Dividends to shareholders ($0.67 per ordinary share)
(154)(154)
Share-based compensation29 29 
Balance at April 2, 2021230 $ $6,939 $(38)$(6,417)$484 






See Notes to Condensed Consolidated Financial Statements.
8


SEAGATE TECHNOLOGY HOLDINGS PLC
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY 
For the Nine Months Ended April 1, 2022 and April 2, 2021
(In millions)
(Unaudited)
Number of Ordinary SharesPar Value of SharesAdditional Paid-in CapitalAccumulated Other Comprehensive Income (Loss)Accumulated DeficitTotal
Balance at July 2, 2021227 $ $6,977 $(41)$(6,305)$631 
Net income1,373 1,373 
Other comprehensive income78 78 
Issuance of ordinary shares under employee share plans
4 68 68 
Repurchases of ordinary shares
(14)(1,333)(1,333)
Tax withholding related to vesting of restricted share units
(1)(45)(45)
Dividends to shareholders ($2.07 per ordinary share)
(457)(457)
Share-based compensation
106 106 
Balance at April 1, 2022216 $ $7,151 $37 $(6,767)$421 
 Number of Ordinary SharesPar Value of SharesAdditional Paid-in CapitalAccumulated Other Comprehensive Income (Loss)Accumulated DeficitTotal
Balance at July 3, 2020257 $ $6,757 $(66)$(4,904)$1,787 
Net income832 832 
Other comprehensive income28 28 
Issuance of ordinary shares under employee share plans4 95 95 
Repurchases of ordinary shares(30)(1,830)(1,830)
Tax withholding related to vesting of restricted share units(1)(33)(33)
Dividends to shareholders ($1.99 per ordinary share)
(482)(482)
Share-based compensation87 87 
Balance at April 2, 2021230 $ $6,939 $(38)$(6,417)$484 

See Notes to Condensed Consolidated Financial Statements.
9


SEAGATE TECHNOLOGY HOLDINGS PLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1.Basis of Presentation and Summary of Significant Accounting Policies
Organization
Seagate Technology Holdings plc (“STX”) and its subsidiaries (collectively, unless the context otherwise indicates, the “Company”) is a leading provider of data storage technology and solutions. Its principal products are hard disk drives, commonly referred to as disk drives, hard drives or HDDs. In addition to HDDs, the Company produces a broad range of data storage products including solid state drives (“SSDs”), solid state hybrid drives (“SSHDs”), storage subsystems, as well as a scalable edge-to-cloud mass data platform that includes data transfer shuttles and a storage-as-a-service cloud.
HDDs are devices that store digitally encoded data on rapidly rotating disks with magnetic surfaces. HDDs continue to be the primary medium of mass data storage due to their performance attributes, reliability, high capacities, superior quality and cost effectiveness. Complementing existing storage architectures, SSDs use integrated circuit assemblies as memory to store data, and most SSDs use NAND flash memory. In contrast to HDDs and SSDs, SSHDs combine the features of SSDs and HDDs in the same unit, containing a high-capacity HDD and a smaller SSD acting as a cache to improve performance of frequently accessed data.
The Company’s HDD products are designed for mass capacity storage and legacy markets. Mass capacity storage involves well-established use cases—such as hyperscale data centers and public clouds as well as emerging use cases. Legacy markets include markets the Company continues to service but that it does not plan to invest in significantly. The Company’s HDD and SSD product portfolio includes Serial Advanced Technology Attachment, Serial Attached SCSI and Non-Volatile Memory Express based designs to support a wide variety of mass capacity and legacy applications.
The Company’s system portfolio includes storage subsystems for enterprises, cloud service providers, scale-out storage servers and original equipment manufacturers (“OEMs”). Engineered for modularity, mobility, capacity and performance, these solutions include the Company’s enterprise HDDs and SSDs, enabling customers to integrate powerful, scalable storage within legacy environments or build new ecosystems from the ground up in a secure, cost-effective manner.
The Company’s Lyve portfolio provides a simple, cost-efficient and secure way to manage massive volumes of data across the distributed enterprise. The Lyve platform includes a shuttle solution that enables enterprises to transfer massive amounts of data from endpoints to the core cloud, a storage-as-a-service cloud that provides frictionless mass capacity storage at the metro edge, a converged object storage solution enabling efficient capture and consolidation of massive data sets and Cortx, an open-source object storage software optimized for mass capacity and data intensive workloads.
Basis of Presentation and Consolidation
The unaudited Condensed Consolidated Financial Statements of the Company and the accompanying notes were prepared in accordance with United States (“U.S.”) Generally Accepted Accounting Principles (“GAAP”). The Company’s unaudited condensed consolidated financial statements include the accounts of the Company and all its wholly-owned and majority-owned subsidiaries, after elimination of intercompany transactions and balances.
The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the Company’s condensed consolidated financial statements and accompanying notes. These estimates and assumptions include the impact of the COVID-19 pandemic. Actual results could differ materially from those estimates. The methods, estimates and judgments the Company uses in applying its most critical accounting policies have a significant impact on the results the Company reports in its condensed consolidated financial statements.
The Company’s consolidated financial statements for the fiscal year ended July 2, 2021 are included in its Annual Report on Form 10-K, as filed with the U.S. Securities and Exchange Commission (“SEC”) on August 6, 2021. The Company believes that the disclosures included in these unaudited condensed consolidated financial statements, when read in conjunction with its consolidated financial statements as of July 2, 2021, and the notes thereto, are adequate to make the information presented not misleading. The results of operations and the cash flows for the three and nine months ended April 1, 2022 are not necessarily indicative of the results to be expected for any subsequent interim period or for the Company’s fiscal year ending July 1, 2022.
10

Fiscal Year
The Company operates and reports financial results on a fiscal year of 52 or 53 weeks ending on the Friday closest to June 30. In fiscal years with 53 weeks, the first quarter consists of 14 weeks and the remaining quarters consist of 13 weeks each. Both the three and nine months ended April 1, 2022 and the three and nine months ended April 2, 2021 consisted of 13 and 39 weeks, respectively. Fiscal year 2022, which ends on July 1, 2022 and fiscal year 2021, which ended on July 2, 2021, are both comprised of 52 weeks. The fiscal quarters ended April 1, 2022, December 31, 2021 and April 2, 2021, are also referred to herein as the “March 2022 quarter”, the “December 2021 quarter” and the “March 2021 quarter”, respectively.
Summary of Significant Accounting Policies
There have been no material changes to the Company’s significant accounting policies disclosed in Note 1. Basis of Presentation and Summary of Significant Accounting Policies of “Financial Statements and Supplementary Data” contained in Part II, Item 8. of the Company’s Annual Report on Form 10-K for the fiscal year ended July 2, 2021, as filed with the SEC on August 6, 2021.
Recently Adopted Accounting Pronouncements
In December 2019, the Financial Accounting Standards Board (“FASB”) issued ASU 2019-12 (ASC Topic 740), Simplifying the Accounting for Income Taxes. This ASU simplifies accounting for income taxes by removing certain exceptions to the general principles and amending existing guidance to improve consistent application. This ASU became effective and the Company adopted the guidance in the quarter ended October 1, 2021. The adoption of this ASU did not have an impact on the Company’s condensed consolidated financial statements.
In July 2021, the FASB issued ASU 2021-05 (ASC Topic 842), Lessors—Certain Leases with Variable Lease Payments. This ASU requires lessors to classify and account for a lease with variable lease payments that do not depend on a reference index or a rate as an operating lease if the lease would have been classified as a sales-type lease or a direct financing lease and the lessor would have otherwise recognized a day-one loss. The Company adopted the guidance in the quarter ended October 1, 2021 on a prospective basis. The adoption of this ASU did not have an impact on the Company’s condensed consolidated financial statements.
Recently Issued Accounting Pronouncements
In March 2020, the FASB issued ASU 2020-04 (ASC Topic 848), Reference Rate Reform. This ASU provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met. Adoption of the expedients and exceptions is permitted upon issuance of this update through December 31, 2022. The Company does not expect the adoption of this ASU to have a material impact on its condensed consolidated financial statements.
In November 2021, the FASB issued ASU 2021-10 (ASC Topic 832), Disclosures by Business Entities about Government Assistance. This ASU requires annual disclosures that increase the transparency of transactions involving government grants, including (1) the type of transactions, (2) the accounting for those transactions and (3) the effect of those transactions on an entity’s financial statements. The Company is required to adopt this new accounting pronouncement in the first quarter of fiscal year 2023. Early adoption is permitted. The Company is in the process of assessing the impact of this ASU on its condensed consolidated financial statements.
2.Balance Sheet Information
Available-for-sale Debt Securities
The following table summarizes, by major type, the fair value and amortized cost of the Company’s available-for-sale debt investments as of April 1, 2022 and July 2, 2021:
11

April 1,
2022
July 2,
2021
(Dollars in millions)Amortized CostUnrealized Gain/(Loss)Fair ValueAmortized CostUnrealized Gain/(Loss)Fair Value
Available-for-sale debt securities:   
Money market funds$176 $ $176 $552 $ $552 
Time deposits and certificates of deposit1  1 1  1 
Other debt securities36 (13)23 18  18 
Total$213 $(13)$200 $571 $ $571 
Included in Cash and cash equivalents  $176 $551 
Included in Other current assets  1 2 
Included in Other assets, net23 18 
Total  $200 $571 
As of both April 1, 2022 and July 2, 2021, the Company’s Other current assets included $2 million in restricted cash and investments held as collateral at banks for various performance obligations.
As of April 1, 2022 and July 2, 2021, the Company had no material available-for-sale debt securities that had been in a continuous unrealized loss position for a period greater than 12 months. The Company recorded $13 million of allowance for credit losses related to an impairment of available-for-sale debt securities as of April 1, 2022. The Company determined no impairment related to credit losses for available-for-sale debt securities as of July 2, 2021.
The fair value and amortized cost of the Company’s investments classified as available-for-sale debt securities as of April 1, 2022, by remaining contractual maturity were as follows:
(Dollars in millions)Amortized CostFair Value
Due in less than 1 year$190 $177 
Due in 1 to 5 years15 15 
Due in 6 to 10 years  
Thereafter8 8 
Total$213 $200 
Cash, Cash Equivalents and Restricted Cash
The following table provides a summary of cash, cash equivalents and restricted cash reported within the Company’s Condensed Consolidated Balance Sheets that reconciles to the corresponding amount in the Company’s Condensed Consolidated Statements of Cash Flows:
(Dollars in millions)April 1,
2022
July 2,
2021
April 2,
2021
July 3,
2020
Cash and cash equivalents$1,138 $1,209 $1,212 $1,722 
Restricted cash included in Other current assets2 2 2 2 
Total cash, cash equivalents and restricted cash shown in the Statements of Cash Flows$1,140 $1,211 $1,214 $1,724 
Accounts Receivable, net
In connection with an existing factoring agreement, from time to time the Company sells trade receivables to a third party for cash proceeds less a discount. During the three and nine months ended April 1, 2022, the Company sold trade receivables without recourse for cash proceeds of $75 million, all of which remained subject to servicing by the Company as of April 1, 2022. During the three and nine months ended April 2, 2021, the Company sold trade receivables without recourse for cash proceeds of $35 million and $183 million, respectively, of which $35 million remained subject to servicing by the Company as of April 2, 2021. The discounts on receivables sold were not material for the three and nine months ended April 1, 2022 and April 2, 2021.
12

Inventories
The following table provides details of the inventory balance sheet item:
(Dollars in millions)April 1,
2022
July 2,
2021
Raw materials and components$536 $375 
Work-in-process456 443 
Finished goods487 386 
Total inventories$1,479 $1,204 
Property, Equipment and Leasehold Improvements, net
The components of property, equipment and leasehold improvements, net, were as follows:
(Dollars in millions)April 1,
2022
July 2,
2021
Property, equipment and leasehold improvements$10,571 $10,378 
Accumulated depreciation and amortization(8,374)(8,197)
Property, equipment and leasehold improvements, net$2,197 $2,181 
 
Accrued Expenses
The following table provides details of the accrued expenses balance sheet item:
(Dollars in millions)April 1,
2022
July 2,
2021
Dividends payable$152 $153 
Other accrued expenses493 455 
Total$645 $608 
Accumulated Other Comprehensive Income (Loss) (“AOCI”)
The components of AOCI, net of tax, were as follows:
(Dollars in millions)Unrealized Gains/(Losses) on Cash Flow HedgesUnrealized Gains/(Losses) on Post-Retirement PlansForeign Currency Translation AdjustmentsTotal
Balance at July 2, 2021$(18)$(22)$(1)$(41)
Other comprehensive income before reclassifications 58 1  59 
Amounts reclassified from AOCI18 1  19 
Other comprehensive income76 2  78 
Balance at April 1, 2022$58 $(20)$(1)$37 
Balance at July 3, 2020$(24)$(26)$(16)$(66)
Other comprehensive income before reclassifications 20   20 
Amounts reclassified from AOCI(9)2 15 8 
Other comprehensive income11 2 15 28 
Balance at April 2, 2021$(13)$(24)$(1)$(38)

13

3.Debt
The following table provides details of the Company’s debt as of April 1, 2022 and July 2, 2021:
(Dollars in millions)April 1,
2022
July 2,
2021
Unsecured Senior Notes(1)
$750 issued on February 3, 2017 at 4.25% due on March 1, 2022 (the “2022 Notes”), interest payable semi-annually on March 1 and September 1 of each year, fully repaid on February 1, 2022.
$ $220 
$1,000 issued on May 22, 2013 at 4.75% due June 1, 2023 (the “2023 Notes”), interest payable semi-annually on June 1 and December 1 of each year.
541 541 
$500 issued on February 3, 2017 at 4.875% due March 1, 2024 (the “2024 Notes”), interest payable semi-annually on March 1 and September 1 of each year.
499 499 
$1,000 issued on May 28, 2014 at 4.75% due January 1, 2025 (the “2025 Notes”), interest payable semi-annually on January 1 and July 1 of each year.
479 479 
$700 issued on May 14, 2015 at 4.875% due June 1, 2027 (the “2027 Notes”), interest payable semi-annually on June 1 and December 1 of each year.
504 504 
$500 issued on June 18, 2020 at 4.091% due June 1, 2029 (the “June 2029 Notes”), interest payable semi-annually on June 1 and December 1 of each year.
464 461 
$500 issued on December 8, 2020 at 3.125% due July 15, 2029 (the “July 2029 Notes”), interest payable semi-annually on January 15 and July 15 of each year.
500 500 
$500 issued on June 10, 2020 at 4.125% due January 15, 2031 (the “January 2031 Notes”), interest payable semi-annually on January 15 and July 15 of each year.
500 499 
$500 issued on December 8, 2020 at 3.375% due July 15, 2031 (the “July 2031 Notes”), interest payable semi-annually on January 15 and July 15 of each year.
500 500 
$500 issued on December 2, 2014 at 5.75% due December 1, 2034 (the “2034 Notes”), interest payable semi-annually on June 1 and December 1 of each year.
489 489 
Term Loan
$600 borrowed on October 14, 2021 at London Interbank Offered Rate (“LIBOR”) plus a variable margin ranging from 1.125% to 2.375%, (the “Term Loan A1”), repayable in quarterly installments beginning on December 31, 2022, with a final maturity date of September 16, 2025.
600 — 
$600 borrowed on October 14, 2021 at LIBOR plus a variable margin ranging from 1.25% to 2.5%, (the “Term Loan A2”), repayable in quarterly installments beginning on December 31, 2022, with a final maturity date of July 30, 2027.
600 — 
$500 borrowed on September 17, 2019 at LIBOR, (the “September 2019 Term Loan”), repayable in quarterly installments of 1.25% of the original principal amount beginning on December 31, 2020, with a final maturity date of September 16, 2025, fully repaid on October 14, 2021.
 481 
5,676 5,173 
Less: unamortized debt issuance costs(32)(34)
Debt, net of debt issuance costs5,644 5,139 
Less: current portion of long-term debt(30)(245)
Long-term debt, less current portion$5,614 $4,894 
______________________________
(1) All unsecured senior notes are issued by Seagate HDD Cayman, and the obligations under these notes are fully and unconditionally guaranteed, on a senior unsecured basis, by Seagate Technology Unlimited Company (“STUC”) and, pursuant to a supplemental indenture dated as of May 18, 2021, STX.



14

Unsecured Senior Notes
2022 Notes. On February 1, 2022, the entire outstanding principal amount of $220 million was repaid at par, plus accrued and unpaid interest. During the nine months ended April 2, 2021, $9 million aggregate principal amount of the 2022 Notes were repurchased for cash at a premium to their principal amount, plus accrued and unpaid interest.
2023 Notes. During the nine months ended April 2, 2021, $5 million aggregate principal amount of the 2023 Notes were repurchased for cash at a premium to their principal amount, plus accrued and unpaid interest. The Company recorded a loss of $1 million on repurchases during the nine months ended April 2, 2021, which is included in Other, net in the Company’s Condensed Consolidated Statements of Operations.
Credit Agreement
The Company’s subsidiary, Seagate HDD Cayman, entered into a credit agreement on February 20, 2019, which was amended on September 16, 2019, January 13, 2021, May 18, 2021 and October 14, 2021 (the “Credit Agreement”).
Prior to the October 14, 2021 amendment, the Credit Agreement provided a term loan facility in an aggregate principal amount of $500 million and a $1.725 billion senior unsecured revolving credit facility (“Revolving Credit Facility”). The September 2019 Term Loan had a final maturity date of September 16, 2025 and the Revolving Credit Facility had a final maturity of February 20, 2024. On September 17, 2019, Seagate HDD Cayman borrowed the $500 million principal amount under the September 2019 Term Loan.
On October 14, 2021, STX and Seagate HDD Cayman entered into an amendment to the Credit Agreement (“Fifth Amendment”), which provides for a new term loan facility in the aggregate principal amount of $1.2 billion that was extended in two tranches of $600 million each (“Term Loan A1” and “Term Loan A2” and together the “Term Loans”). Term Loan A1 and Term Loan A2 were each drawn in full on the closing date for the Fifth Amendment. Term Loan A1 bears interest at a rate of LIBOR plus a variable margin ranging from 1.125% to 2.375% that will be determined based on the corporate credit rating of the Company. Term Loan A1 is repayable in quarterly installments beginning on December 31, 2022 and has a final maturity date of September 16, 2025. Term Loan A2 bears interest at a rate of LIBOR plus a variable margin ranging from 1.25% to 2.5% that will be determined based on the corporate credit rating of the Company. Term Loan A2 is repayable in quarterly installments beginning on December 31, 2022 and has a final maturity date of July 30, 2027. The proceeds of the Terms Loans may be used for, among other things, general corporate purposes.
In addition, pursuant to the Fifth Amendment, the maturity date for the revolving loan commitments under the Revolving Credit Facility was extended until October 14, 2026, the revolving commitments were increased to $1.75 billion and the interest rate margins for the revolving loans were amended to LIBOR plus a variable margin ranging from 1.125% to 2.375% that will be determined based on the corporate credit rating of the Company.
STX and certain of its material subsidiaries, including STUC, fully and unconditionally guarantee both the Revolving Credit Facility and the Term Loans.
The Credit Agreement includes three financial covenants: (1) interest coverage ratio, (2) total leverage ratio and (3) a minimum liquidity amount. The Company was in compliance with the covenants as of April 1, 2022 and expects to be in compliance for the next 12 months. As of April 1, 2022, no borrowings (including swingline loans) were outstanding and no commitments were utilized for letters of credit issued under the Revolving Credit Facility.
Future Principal Payments on Long-term Debt
At April 1, 2022, future principal payments on long-term debt were as follows (in millions):
Fiscal YearAmount
Remainder of 2022$ 
2023585 
2024560 
2025562 
2026563 
Thereafter3,445 
Total$5,715 

15

4.Income Taxes
The Company recorded income tax provisions of $5 million and $25 million for the three and nine months ended April 1, 2022, respectively. The income tax provision for the three months ended April 1, 2022 included approximately $6 million of net discrete tax benefit, primarily associated with a change in the applicable tax rate within its non-U.S. operations. The income tax provision for the nine months ended April 1, 2022 included approximately $15 million of net discrete tax benefit, primarily associated with the net excess tax benefits related to share-based compensation expense.
During the nine months ended April 1, 2022, the Company’s unrecognized tax benefits excluding interest and penalties increased by approximately $8 million to $116 million, substantially all of which would impact the effective tax rate, if recognized, subject to certain future valuation allowance reversals. During the twelve months beginning April 2, 2022, the Company expects that its unrecognized tax benefits could be reduced by an immaterial amount, as a result of the expiration of certain statutes of limitation.
The Company recorded income tax provisions of $10 million and $19 million for the three and nine months ended April 2, 2021, respectively. The income tax provision for the three months ended April 2, 2021 included approximately $4 million of net discrete tax benefit, primarily associated with filing of tax returns in various jurisdictions. The income tax provision for the nine months ended April 2, 2021 included approximately $15 million of net discrete tax benefits, primarily associated with net excess tax benefits related to share-based compensation expense, filing of tax returns in various jurisdictions and postponement of the previously enacted United Kingdom tax rate change in the quarter ended October 2, 2020.
The Company’s income tax provision recorded for the three and nine months ended April 1, 2022 and April 2, 2021 differed from the provision for income taxes that would be derived by applying the Irish statutory rate of 25% to income before income taxes, primarily due to the net effect of tax benefits related to (i) non-Irish earnings generated in jurisdictions that are subject to tax incentive programs and are considered indefinitely reinvested outside of Ireland and (ii) current year generation of research credits.
5.Restructuring and Exit Costs
For the nine months ended April 1, 2022, the Company recorded restructuring charges of $2 million. For the three and nine months ended April 2, 2021, the Company recorded a net gain of $2 million, comprised primarily of a gain of $3 million from sale of a property and restructuring charges of $1 million. The Company’s restructuring plans are comprised primarily of charges related to workforce reduction costs and facilities and other exit costs. All restructuring charges are reported in Restructuring and other, net on the Company’s Condensed Consolidated Statements of Operations.