Seagate Technology Holdings plcSTX
Seagate Technology Holdings plc Fair Value Disclosure
Fair Value
Measurement of Fair Value
Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants would use when pricing the asset or liability.
Fair Value Hierarchy
A fair value hierarchy is based on whether the market participant assumptions used in determining fair value are obtained from independent sources (observable inputs) or reflect the Company's own assumptions of market participant valuation (unobservable inputs). A financial instrument's categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The three levels of inputs that may be used to measure fair value are:
Level 1 - Quoted prices in active markets that are unadjusted and accessible at the measurement date for identical, unrestricted assets or liabilities;
Level 2 - Quoted prices for identical assets and liabilities in markets that are inactive; quoted prices for similar assets and liabilities in active markets or financial instruments for which significant inputs are observable, either directly or indirectly; or
Level 3 - Prices or valuations that require inputs that are both unobservable and significant to the fair value measurement.
The Company considers an active market to be one in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis and views an inactive market as one in which there are few transactions for the asset or liability, the prices are not current, or price quotations vary substantially either over time or among market makers. Where appropriate, the Company’s or the counterparty’s non-performance risk is considered in determining the fair values of liabilities and assets, respectively.
Items Measured at Fair Value on a Recurring Basis
The following tables present the Company’s assets and liabilities, by financial instrument type and balance sheet line item that are measured at fair value on a recurring basis, excluding accrued interest components, as of:
| June 27, 2025 | June 28, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fair Value Measurements at Reporting Date Using | Fair Value Measurements at Reporting Date Using | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in millions) | Balance Sheet Location | Quoted Prices in Active Markets for Identical Instruments (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total Balance | Quoted Prices in Active Markets for Identical Instruments (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total Balance | |||||||||||||||||||||||||||||||||||||||||||||||
| Assets: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Money market funds | Cash and cash equivalents | $ | 226 | $ | — | $ | — | $ | 226 | $ | 386 | $ | — | $ | — | $ | 386 | |||||||||||||||||||||||||||||||||||||||
| Time deposits | Cash and cash equivalents | — | 26 | — | 26 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
| Total cash equivalents | 226 | 26 | — | 252 | 386 | — | — | 386 | ||||||||||||||||||||||||||||||||||||||||||||||||
| Restricted cash and investments: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Money market funds | Other current assets | 1 | — | — | 1 | 1 | — | — | 1 | |||||||||||||||||||||||||||||||||||||||||||||||
| Time deposits and certificates of deposit | Other current assets | — | 1 | — | 1 | — | 1 | — | 1 | |||||||||||||||||||||||||||||||||||||||||||||||
| Other debt securities | Other assets, net | — | — | — | — | — | — | 15 | 15 | |||||||||||||||||||||||||||||||||||||||||||||||
| Other current assets | — | 1 | — | 1 | — | 1 | — | 1 | ||||||||||||||||||||||||||||||||||||||||||||||||
| Total assets | $ | 227 | $ | 28 | $ | — | $ | 255 | $ | 387 | $ | 2 | $ | 15 | $ | 404 | ||||||||||||||||||||||||||||||||||||||||
| Liabilities: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Accrued expenses | $ | — | $ | — | $ | — | $ | — | $ | — | $ | (1) | $ | — | $ | (1) | ||||||||||||||||||||||||||||||||||||||||
| Total liabilities | $ | — | $ | — | $ | — | $ | — | $ | — | $ | (1) | $ | — | $ | (1) | ||||||||||||||||||||||||||||||||||||||||
As of June 27, 2025 and June 28, 2024, the Company’s Other current assets included $2 million in restricted cash equivalents held as collateral at banks for various performance obligations.
As of June 27, 2025 and June 28, 2024, the Company had no material available-for-sale investments that had been in a continuous unrealized loss position for a period greater than 12 months. In fiscal year 2025, the Company sold available-for-sale investments for $41 million. The Company also recorded a net loss of $15 million on available-for-sale investments, related to downward adjustments to write down the carrying amount of certain investments to their fair value during fiscal year 2025, which was recorded to Other, net in the Company’s Consolidated Statements of Operations. The Company determined no impairment related to credit losses for available-for-sale investments for fiscal year 2024.
The fair value and amortized cost of the Company’s available-for-sale investments as of June 27, 2025, was immaterial. The fair value and amortized cost of the Company’s available-for-sale investments as of June 28, 2024 was $15 million due in 2 years.
Items Measured at Fair Value on a Non-Recurring Basis
From time to time, the Company enters into certain strategic investments for the promotion of business and strategic objectives, which are accounted for either under the equity method or the measurement alternative. Investments under the measurement alternative are recorded at cost, less impairment and adjusted for qualifying observable price changes on a prospective basis. If measured at fair value in the Consolidated Balance Sheets, these investments would generally be classified in Level 3 of the fair value hierarchy.
For the investments that are accounted for under the equity method, the Company sold certain investments for $9 million and recorded an immaterial gain for fiscal year 2025. The Company sold certain investments for $14 million and recorded an immaterial gain for the fiscal year 2024. The Company recorded a net loss of $29 million for fiscal year 2024, which included $25 million related to downward adjustments to write down the carrying amount of certain investments to their fair value. The Company recorded an immaterial net loss in fiscal year 2023. The adjusted carrying value of the investments accounted under the equity method was immaterial and $12 million as of June 27, 2025 and June 28, 2024 respectively.
For the investments that are accounted under the measurement alternative, the Company recorded a net loss of $39 million and $24 million for fiscal years 2025 and 2024, respectively, related to downward adjustments to write down the carrying amount of certain investments to their fair value. For fiscal year 2023, the Company recorded an immaterial net loss. As of June 27, 2025 and June 28, 2024, the carrying value of the Company’s strategic investments under the measurement alternative was $26 million and $65 million, respectively.
Other Fair Value Disclosures
The Company’s debt is carried at amortized cost. The estimated fair value of the Company’s debt is derived using the closing price of the same debt instruments as of the date of valuation, which takes into account the yield curve, interest rates and other observable inputs. Accordingly, these fair value measurements are categorized as Level 2. The following table presents the fair value and amortized cost of the Company’s debt in order of maturity:
| June 27, 2025 | June 28, 2024 | |||||||||||||||||||||||||
| (Dollars in millions) | Carrying Amount | Estimated Fair Value | Carrying Amount | Estimated Fair Value | ||||||||||||||||||||||
4.75% Senior Notes due January 2025 | — | — | 479 | 476 | ||||||||||||||||||||||
4.875% Senior Notes due June 2027 | — | — | 505 | 493 | ||||||||||||||||||||||
3.50% Exchangeable Senior Notes due June 2028 | 1,500 | 2,654 | 1,500 | 2,070 | ||||||||||||||||||||||
4.091% Senior Notes due June 2029 | 452 | 453 | 471 | 459 | ||||||||||||||||||||||
3.125% Senior Notes due July 2029 | 138 | 125 | 163 | 139 | ||||||||||||||||||||||
8.25% Senior Notes due December 2029 | 500 | 535 | 500 | 537 | ||||||||||||||||||||||
5.875% Senior Notes due July 2030 | 400 | 407 | — | — | ||||||||||||||||||||||
4.125% Senior Notes due January 2031 | 237 | 218 | 275 | 245 | ||||||||||||||||||||||
3.375% Senior Notes due July 2031 | 61 | 52 | 72 | 58 | ||||||||||||||||||||||
8.50% Senior Notes due July 2031 | 500 | 538 | 500 | 538 | ||||||||||||||||||||||
9.625% Senior Notes due December 2032 | 750 | 854 | 750 | 855 | ||||||||||||||||||||||
5.75% Senior Notes due December 2034 | 489 | 482 | 489 | 472 | ||||||||||||||||||||||
| $ | 5,027 | $ | 6,318 | $ | 5,704 | $ | 6,342 | |||||||||||||||||||
| Less: unamortized debt issuance costs | (32) | — | (30) | — | ||||||||||||||||||||||
| Debt, net of debt issuance costs | $ | 4,995 | $ | 6,318 | $ | 5,674 | $ | 6,342 | ||||||||||||||||||
| Less: current portion of debt, net of debt issuance costs | — | — | (479) | (476) | ||||||||||||||||||||||
| Long-term debt, less current portion, net of debt issuance costs | $ | 4,995 | $ | 6,318 | $ | 5,195 | $ | 5,866 | ||||||||||||||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Aug 1, 2025 | Showing above |
| 2024 | Aug 2, 2024 | |
| 2023 | Aug 4, 2023 | |
| 2022 | Aug 5, 2022 | |
| 2020 | Aug 7, 2020 | |
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.