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TableofContents
AsofJuly1,2016,approximately$677millionofourU.S.netoperatinglossesand$99millionofourtaxcreditcarryforwardsaresubjecttoannual
limitationsfrom$1millionto$45millionpursuanttoU.S.taxlaw.
AsofJuly1,2016andJuly3,2015,wehadapproximately$70millionand$83million,respectively,ofunrecognizedtaxbenefitsexcludinginterestand
penalties.Theamountofunrecognizedtaxbenefitsthat,ifrecognized,wouldimpacttheeffectivetaxrateare$70millionand$83millionasofJuly1,2016and
July3,2015,respectively,subjecttocertainfuturevaluationallowanceoffsets.
ItisourpolicytoincludeinterestandpenaltiesrelatedtounrecognizedtaxbenefitsintheprovisionforincometaxesonourConsolidatedStatementsof
Operations.Duringfiscalyear2016,werecognizedanetincometaxbenefitforinterestandpenaltiesof$8millionascomparedtoanetincometaxexpensefor
interestandpenaltiesof$26millionduringfiscalyear2015and$8millionduringfiscalyear2014.AsofJuly1,2016,wehad$12millionofaccruedinterestand
penaltiesrelatedtounrecognizedtaxbenefitscomparedto$20millioninfiscalyear2015.
DuringthefiscalyearendedJuly1,2016,ourunrecognizedtaxbenefitsexcludinginterestandpenaltiesdecreasedbyapproximately$13millionprimarily
dueto(i)reductionsassociatedwiththeexpirationofcertainstatutesoflimitationof$27million,(ii)increasesincurrentyearunrecognizedtaxbenefitsof
$11million,(iii)netincreasesinprioryears'unrecognizedtaxbenefitsof$4million,(iv)netreductionsfromotheractivity,includingnon-U.S.exchangegains,of
$1million.
Duringthe12monthsbeginningJuly2,2016,weexpectthatourunrecognizedtaxbenefitscouldbereducedbyapproximately$16millionasaresultofthe
expirationofcertainstatutesoflimitation.
WearesubjecttotaxationinmanyjurisdictionsgloballyandarerequiredtofileU.S.federal,U.S.state,andnon-U.Sincometaxreturns.OnApril4,2016,
theIRSapprovedtheauditsettlementreachedinDecember2015regardingalldisputedissuesassociatedwithourU.S.federalincometaxreturnsforfiscalyears
2008,2009and2010.Thisauditsettlementdidnothaveamaterialimpactonourfinancialstatements.
WearenolongersubjecttotaxexaminationofU.S.federalincometaxreturnsforyearspriortofiscalyear2013.WithrespecttoU.S.stateandnon-U.S.
incometaxreturns,wearegenerallynolongersubjecttotaxexaminationforyearsendingpriortofiscalyear2005.
FiscalYear2015ComparedtoFiscalYear2014
Revenue
Revenueinfiscalyear2015remainedflatfromfiscalyear2014,asaresultofrevenuecontributedfromouracquisitionsofXyratexandLSI'sFlashBusiness
andafavorableproductmix,partiallyoffsetbya4%decreaseinunitsshippedandmoderatepriceerosion.
CostofRevenueandGrossMargin
51
 FiscalYearsEnded
(Dollarsinmillions) 
July3,
2015
June27,
2014 Change
%
Change
Revenue  $ 13,739 $ 13,724 $ 15  0.1%
 FiscalYearsEnded
(Dollarsinmillions) 
July3,
2015
June27,
2014 Change
%
Change
Costofrevenue  $ 9,930 $ 9,878 $ 52  1%
Grossmargin  $ 3,809 $ 3,846 $ (37) (1)%
Grossmarginpercentage   28% 28%   