NetApp 10-K 2016-04-29

10-K 1 ntap-10k_20160429.htm 10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-K

(Mark One)

R	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

	For the fiscal year ended April 29, 2016

or

£	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 000-27130

NetApp, Inc.

(Exact name of registrant as specified in its charter)

Delaware		77-0307520
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

495 East Java Drive,

Sunnyvale, California 94089

(Address of principal executive offices, including zip code)

(408) 822-6000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Name of exchange on which registered
Common Stock, $0.001 Par Value		The NASDAQ Stock Market LLC

Securities registered pursuant to Section 12(g) of the Act:

None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes þ No o

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No þ

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 þ No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted 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 and post such files). Yes þ No o

Indicate by a check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer		þ		Accelerated filer		o
Non-accelerated filer		o	(Do not check if a smaller reporting company)	Smaller reporting company		o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ

The aggregate market value of voting stock held by non-affiliates of the registrant, as of October 30, 2015, the last business day of the registrant’s most recently completed second fiscal quarter, was $5,131,692,964 (based on the closing price for shares of the registrant’s common stock as reported by the NASDAQ Global Select Market on that date). Shares of common stock held by each executive officer, director, and holder of 5% or more of the outstanding common stock have been excluded in that such persons may be deemed to be affiliates. This determination of possible affiliate status is not a conclusive determination for other purposes.

On June 10, 2016, 280,080,152 shares of the registrant’s common stock, $0.001 par value, were outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

The information called for by Part III of this Form 10-K is hereby incorporated by reference from the definitive Proxy Statement for our annual meeting of stockholders, which will be filed with the Securities and Exchange Commission not later than 120 days after April 29, 2016.

TABLE OF CONTENTS

		PART I
Item 1		Business		3
Item 1A		Risk Factors		15
Item 1B		Unresolved Staff Comments		25
Item 2		Properties		25
Item 3		Legal Proceedings		25
Item 4		Mine Safety Disclosures		25
		PART II
Item 5		Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities		26
Item 6		Selected Financial Data		29
Item 7		Management’s Discussion and Analysis of Financial Condition and Results of Operations		30
Item 7A		Quantitative and Qualitative Disclosures About Market Risk		49
Item 8		Financial Statements and Supplementary Data		51
Item 9		Changes in and Disagreements with Accountants on Accounting and Financial Disclosure		89
Item 9A		Controls and Procedures		89
Item 9B		Other Information		89
		PART III
Item 10		Directors, Executive Officers and Corporate Governance		90
Item 11		Executive Compensation		90
Item 12		Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters		90
Item 13		Certain Relationships and Related Transactions, and Director Independence		90
Item 14		Principal Accounting Fees and Services		90
		PART IV
Item 15		Exhibits, Financial Statement Schedules		90
Signatures				91

Cautionary Note on Forward-Looking Statements

This Annual Report on Form 10-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act). Forward-looking statements are all statements (and their underlying assumptions) included in this document that refer, directly or indirectly, to future events or outcomes and, as such, are inherently not factual, but rather reflect only our current projections for the future. Consequently, forward-looking statements usually include words such as “estimate,” “intend,” “plan,” “predict,” “seek,” “may,” “will,” “should,” “would,” “could,” “anticipate,” “expect,” “believe,” or similar words, in each case, intended to refer to future events or circumstances. A non-comprehensive list of the topics including forward-looking statements in this document includes:

	·	our future financial and operating results;

	·	our strategy;

	·	our beliefs and objectives for future operations, research and development;

	·	expectations regarding future product releases, growth and performance;

	·	political, economic and industry trends;

	·	expected timing of, customer acceptance of and benefits from, product introductions, developments and enhancements;

	·	expected benefits from acquisitions, including our acquisition of SolidFire, Inc. and joint ventures, growth opportunities and investments;

	·	expected outcomes from legal, regulatory and administrative proceedings;

	·	our competitive position;

	·	our short-term and long-term cash requirements, including, without limitation, anticipated capital expenditures;

	·	our anticipated tax rate;

	·	the repayment of our 2.00% Senior Notes due on December 15, 2017, 3.375% Senior Notes due on June 15, 2021 and 3.25% Senior Notes due on December 15, 2022 (collectively referred to as the Senior Notes);

	·	the repayment of the debt we incurred in relation to our acquisition of SolidFire, Inc. using global funds, and

	·	future uses of our cash, including, without limitation, the continuation of our stock repurchase and cash dividend programs.

All forward-looking statements included in this document are inherently uncertain as they are based on management’s current expectations and assumptions concerning future events, and are subject to numerous known and unknown risks and uncertainties. Therefore, actual events and results may differ materially from these forward-looking statements. Factors that could cause actual results to differ materially from those described herein include, but are not limited to:

	·	the overall growth, structure and changes of the data storage industry;

	·	our ability to understand, and effectively respond to changes affecting, our market environment, products, technologies and customer requirements, including the impact of the cloud;

	·	our ability to gain customer acceptance of new products and enable customer transitions from older products;

	·	general global political, macroeconomic and market conditions;

	·	our ability to accurately forecast demand for our products and services, and future financial performance;

	·	our ability to successfully manage our backlog;

	·	our ability to successfully execute on our strategy to generate profitable growth and stockholder return;

	·	our ability to reduce our cost structure, streamline the business and improve efficiency;

	·	disruptions in our supply chain, which could limit our ability to ship products to our customers in the amounts and at the prices forecasted;

	·	our ability to maintain our customer, partner, supplier and contract manufacturer relationships on favorable terms and conditions;

	·	our ability to maintain our gross profit margins;

	·	our ability to timely and successfully introduce and increase volumes of new products and services and to forecast demand and pricing for the same;

	·	changes in U.S. government spending;

	·	the actions of our competitors including, without limitation, their ability to introduce competitive products and to acquire businesses and technologies that negatively impact our strategy, operations or customer demand for our products;

	·	the impact of industry consolidation affecting our suppliers, competitors, partners and customers;

	·	our ability to grow direct and indirect sales and to efficiently provide global service and support;

	·	our ability to design, manufacture and market products meeting global environmental standards;

	·	failure of our products and services to meet our customers’ quality requirements, including, without limitation, any epidemic failure event relating to our systems installed by our customers in their IT infrastructures;

	·	our ability to resolve ongoing litigation, tax audits, government audits, inquiries and investigations in line with our expectations;

	·	the availability of acceptable financing to support our future cash requirements;

	·	our ability to effectively integrate acquired businesses, products and technologies, including SolidFire, Inc.;

	·	valuation and liquidity of our investment portfolio;

	·	foreign exchange rate impacts;

	·	our ability to successfully recruit and retain critical employees and to manage our investment in people, process and systems;

	·	our ability to anticipate techniques used to obtain unauthorized access or to sabotage systems and to implement adequate preventative measures against cybersecurity and other security breaches; and

	·	those factors discussed under the heading “Risk Factors” elsewhere in this Annual Report on Form 10-K.

Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this document and are based upon information available to us at this time. These statements are not guarantees of future performance. Except as required by law, we disclaim any obligation to update information in any forward-looking statement. Actual results could vary from our forward-looking statements due to the foregoing factors as well as other important factors.

PART I

Overview

NetApp®, Inc. (NetApp, we or us) provides software, systems and services to manage and store customer data. We enable enterprises, service providers, governmental organizations, and partners to envision, deploy and evolve their IT environments. Customers benefit from our collaboration with other technology leaders to create the specific solutions they need. We were incorporated in 1992 and created the world’s first networked storage appliance. Today, we offer a portfolio of products and services that satisfy a broad range of customer workloads across different data types and deployment models.

Customer Needs

Customers continue to seek IT solutions that help to improve efficiency, lower risk and position them to respond quickly to growth opportunities. In an increasingly mobile, social and digitally connected world, they also need access to real-time insights and have the ability to personalize the experiences they deliver to their own customers. NetApp provides guidance and innovation to help its customers achieve the right balance of flexibility, cost and data control.

Chief Information Officers are embarking on IT transformations to improve the efficiency of their businesses and better serve their customers. Cloud computing has emerged as a way to more effectively meet rapidly changing business needs. Customers want to seamlessly integrate public cloud resources as an extension of their internal IT environment, an approach known as hybrid cloud. One of the biggest challenges to this vision is data management. While other parts of the IT infrastructure are largely interchangeable and carry no history, once data is created it needs to be protected and managed for its lifetime. As data grows, data and application mobility consume more time and bandwidth. The net result is that data management, NetApp's core competency, has become essential to realizing the promise of the hybrid cloud.

Data management on the hybrid cloud today is essentially a series of isolated siloes. IT organizations need to harmonize the management of data across all cloud providers, as well as on premises. This is what we call the Data Fabric. Our Data Fabric strategy defines the NetApp technology architecture for hybrid cloud. Today, we offer solutions that help customers seamlessly manage their data across their diverse IT resources, spanning flash, disk, and cloud. Customers have the flexibility to choose the right set of resources to meet the needs of their applications and the freedom to change them whenever they want. Customers are entirely in control of their data, regardless of the cloud that it sits on and regardless of the landscape in which it is deployed.

At the same time that customers are navigating through their IT transformations, which leverage modern architectures and hybrid cloud environments, they are also reducing IT budgets, looking for simpler solutions, and rethinking how they consume IT. This evaluation is diverting spending towards transformational projects and architectures like flash, hybrid cloud, converged infrastructure, and software defined storage. It is in these areas that our Data Fabric strategy gives us an advantage.

Flash. Flash plays a key role in customers’ IT transformation efforts as they seek to gain advantage through greater speed, responsiveness, and value from key business applications, while substantially lowering total cost of ownership. All-flash array technology is becoming the de facto technology for primary application workloads as customers look to realize performance and economic benefits by replacing hard disk installations with flash. With a highly differentiated and complete portfolio of all-flash array offerings, NetApp is well positioned to enable customers to accomplish this transition.

Hybrid Cloud. NetApp believes that the hybrid cloud will become the dominant model for enterprise IT for years to come. Customers are attracted by the speed and scale benefits of the public cloud but need new data management capabilities to keep control of data as it moves beyond the walls of the enterprise. Our Data Fabric strategy enables data management that seamlessly connects disparate clouds and data centers. We enable our customers to manage, secure, and protect their data across flash, disk, and public and private cloud resources, all at the scale needed to accommodate the exponential data growth of the digital world.

Converged Infrastructure. Due to budget constraints and skill imbalances, our customers need greater support from their technology partners to evaluate, integrate, deploy and sustain the sophisticated solutions they need to stay competitive. This trend is driving the demand for converged infrastructure solutions that reduce the time of deployment and lower integration risk. NetApp offers compelling business value through our FlexPod® converged solutions, which reduce risks in ways that cannot be matched by the proprietary stacks offered by server vendors. FlexPod offerings, created in partnership with Cisco, provide a broad range of reference architectures.

Software-defined Storage: As customers replace their traditional storage architectures and transform their data centers, they want scale-out and software-defined storage functionality to both manage data growth efficiently and deliver service provider-like flexibility. Clustered Data ONTAP provides this through a highly efficient, multi-tenant, non-stop shared storage infrastructure to replace legacy, stovepipe architectures for enterprise applications like database, virtualization, VDI, and e-commerce. As customers plan their hybrid cloud architectures, the software defined architecture of clustered ONTAP provides a consistent way to manage data across public and private clouds, regardless of underlying hardware.

Product, Services and Solutions Portfolio

Our data management and storage offerings help improve business productivity, performance and profitability, while providing investment protection and enhanced asset utilization. We complement our enterprise-class storage solutions with services expertise that maximizes the business benefits our customers gain from deploying our products. In fiscal 2016, we focused on our Data Fabric strategy and the strategic solutions that form the foundation of how we enable customer success in the data-powered digital era.

All Flash Arrays

All Flash FAS

In June 2015, NetApp introduced a new all-flash series, the All Flash FAS, which is the only all-flash system to support seamless data management across flash, disk and cloud resources. This capability makes these systems ideal for customers who want to boost performance in their traditional data centers while mapping out their move to a hybrid cloud model. Built on years of flash innovation and experience, the NetApp All Flash FAS 8000 (AFF) series delivers high I/O at consistent low latency without compromising on core enterprise requirements, such as robust data management, efficient data protection, and flexibility to respond to changing customer needs. These systems are ideal for database, VDI and server virtualization applications.

The AFF series incorporates FlashEssentials software optimizations, which increase flash performance and efficiency. FlashEssentials is included in the ONTAP operating system, which underpins the Data Fabric, AFF models can be ordered as standalone systems and in FlexPod as a converged infrastructure validated designs. Professional services, delivered by NetApp or its partners, help users identify those workloads that are best served by all-flash systems.

Since its introduction, the AFF array line has become one of the fastest growing products in NetApp’s history. We announced a smaller footprint AFF model in September 2015. New software efficiency technology and higher capacity drives for the AFF line were announced in November 2015, making it possible for customers to get the performance of flash at the price of disk.

EF-Series

The NetApp EF560 all-flash array targets applications that demand extremely high levels of performance, reliability, and availability. These systems allow customers to improve the user experience for customer-facing and decision-support systems and reduce their power, footprint and cooling requirements by 95% versus disk-based arrays.

Requiring just 2 units of rack space, the EF560 all-flash array combines extreme IOPS, microsecond response times, and up to 12GBps of bandwidth. Its enterprise-proven availability features include redundant components with automated failover, intuitive storage management with comprehensive tuning functions, and advanced monitoring and diagnostics with proactive repair. Customers can initiate NetApp Snapshot® copies and remote replication for subsecond backup and long-distance recovery.

NetApp SANtricity Plug-Ins for Microsoft, Oracle, Splunk, and VMware provide a consolidated view of the NetApp EF-Series systems, enabling users to monitor and manage their NetApp EF-Series storage from the application. Having such an integrated tool reduces the total cost of ownership by eliminating the need to manually compile critical information from several different tools.

SolidFire

In February 2016, NetApp completed the acquisition of all-flash startup company SolidFire, Inc., which when combined with our existing all-flash offerings, allows us to offer the industry’s broadest portfolio of all-flash solutions. SolidFire systems target a new class of customer who is masterminding the next-generation data center and wants cloud-like capabilities from their on-premises storage for greater flexibility. These users place a priority on the ability to scale simply and seamlessly.

The SolidFire all-flash platform solves the challenges of resource allocation, simplified management, and application predictability at scale. The platform includes SolidFire SF Series hardware and Element OS software, which combine to enable flexible, independent scaling of both capacity and performance so customers can guarantee performance to thousands of applications on one shared storage system.

With SolidFire systems, customers realize the agility, efficiency, and scalability benefits demonstrated from cloud computing in an on-premises system that is highly available and easy to control. They can reduce cost and complexity by safely consolidating mission-critical applications onto a single storage platform. Deep infrastructure integration contributes to greater productivity, while deep automation capabilities enable dynamic, rapid allocation and tear down of storage resources for on-demand provisioning.

Hybrid Arrays

NetApp hybrid flash storage serves customers who want the option to deploy the speed of flash storage where they need it while using more affordable hard disk drives (HDDs) to address capacity requirements. NetApp hybrid arrays include the FAS series of unified storage systems and the E-Series of block storage offerings.

Converged Infrastructure

Backed by one of the most successful alliances in the industry, FlexPod over the past five years has become the converged infrastructure of choice for many of the largest enterprises around the globe. FlexPod is a portfolio of pre-validated, integrated infrastructure solutions that combine the Cisco Unified Computing System integrated infrastructure and NetApp storage components. Today, customers and partners can choose from more than 100 validated application and infrastructure designs. These solutions are designed and validated to reduce deployment time, project risk, and the cost of IT. The FlexPod portfolio includes FlexPod Datacenter for core enterprise data centers and service providers, FlexPod Express for medium-sized businesses and branch offices, and FlexPod Select for data-intensive workloads. The portfolio is validated with leading hypervisors, operating systems, systems management tools, and cloud management platforms.

Data Management Software

Data ONTAP Storage Operating System

NetApp’s Data ONTAP operating system software is the back bone to building a shared storage infrastructure and Data Fabric for the full breadth of business applications, data storage and protection requirements. NetApp introduced unified storage more than a decade ago with the industry's first unified SAN and NAS scale-out storage software. Today, customers use NetApp clustered Data ONTAP storage operating system as the foundation for data management across flash, disk and cloud storage resources. Customers can maintain control of their data across the hybrid cloud through consistent processes, features, and data management tools, regardless of where their data resides.

In June 2015, NetApp added to the capabilities of clustered Data ONTAP with FlashEssentials, a set of integrated technologies that increase flash performance and efficiency. This includes a flash-optimized read data path, inline compression, and zero-based inline deduplication. In November 2015, new inline deduplication capabilities were announced that extend the life of flash media, especially for customers with VDI workloads. In storage test scenarios, NetApp has demonstrated the ability to reduce capacity requirements by as much as 30:1, enabling customers to transition to flash using less storage and driving down overall cost. This update also included the Copy-free Transition capability, which allows customers to shift from earlier versions of Data ONTAP to clustered Data ONTAP with in-place data conversion.

In early fiscal 2017, we expect to launch the latest release of ONTAP software, which will be called NetApp ONTAP 9. It will simplify customers’ IT transformations to modern data centers and hybrid cloud environments. Customers can choose the architecture of their choice, (engineered systems, software-defined storage, or cloud,) all with industry-leading efficiency, performance, and density for flash environments; rapid and simplified deployment; and greater data protection and security. With this release, we also expect to change the naming framework for our Data ONTAP operating system to a single family name for the product (ONTAP). The ONTAP 9 product, which will run on AFF and FAS systems, will replace what was formerly called clustered Data ONTAP. ONTAP Cloud for AWS will be the new name for Cloud ONTAP. In addition, we expect to introduce NetApp ONTAP Select, a software-defined deployment of ONTAP that will run on commodity servers.

SANtricity Storage Operating System

The NetApp SANtricity operating system provides superior performance, reliability, and data protection for application-driven workloads that run on NetApp EF-Series and E-Series platforms. It allows customers to optimize performance on the fly, with adaptive caching algorithms to achieve high IOPS and throughput. Installed on a million systems worldwide, the SANtricity OS is field-proven. In addition, SANtricity Storage Manager offers a powerful, easy-to-use interface for administering E-Series storage systems. With SANtricity software, storage administrators can achieve maximum performance and utilization of storage through extensive configuration flexibility and custom performance tuning. The newest release of the SANtricity OS, announced in April 2016, is optimized for the new generations of data analytics applications.

SolidFire Element Operating System

The NetApp SolidFire Element OS is at the core of every SolidFire infrastructure and is optimized for the key storage requirements of a next-generation data center. Scale-out functionality enables seamless and granular growth to meet business demands by adding capacity and performance for each new business. Customers have complete control of utilization performance to optimize their infrastructure by managing performance independent of capacity. With automated management, IT organizations can respond to business demands rapidly with on-the-fly adjustments. Helix data protection provides assurance for workload and data consolidation. Always on deduplication, compression, and thin provisioning maximize total cost of ownership by driving down requirements for storage space and power costs.

Object Storage Software

NetApp StorageGRID® Webscale software allows organizations to store and manage massive amounts of data worldwide, on premises and in the cloud. StorageGRID Webscale is a purpose-built, patented, software-defined storage solution for large archives, media repositories, and web data stores. The sophisticated StorageGRID Webscale policy engine provides automated data placement

across storage tiers, physical sites, and hybrid clouds. It can be tuned according to customers’ performance and availability requirements and optimized for cost as data ages. Real-time auditing provides continuous and active monitoring for service-level agreement verification and reporting. NetApp enables support for Amazon Simple Storage Service (S3) as a storage tier to StorageGRID Webscale, providing a scalable, highly durable object storage solution for long-term archives.

Backup and Data Protection Solutions

NetApp offers a range of products to protect customers’ valuable data and applications. These provide optimal availability and IT efficiency while safeguarding data assets.

AltaVault® Cloud-integrated Solutions

In May 2015, NetApp introduced AltaVault, previously SteelStore, cloud-integrated storage solutions and services, which provide customers with the ability to quickly backup data to any cloud at up to 90 percent less cost than on-premises solutions. AltaVault can send data with ease to NetApp StorageGRID Webscale object storage software and most public and private object stores, providing durable, cost-effective, private cloud archives at web scale. In October 2015, NetApp was one of the first partners to announce support for Amazon S3 storage through integration with AltaVault. This gives customers an affordable option for cloud storage that can be quickly accessed.

With AltaVault, customers have the power to tap into cloud economics while preserving investments in existing backup infrastructure and meeting their backup and recovery service levels. AltaVault is offered in three deployment models to meet customer needs. AltaVault physical appliances are often deployed in the data center to protect large volumes of data. These datasets typically require the highest levels of performance and scalability available. AltaVault virtual appliances, with support for VMware and Hyper-V, are an ideal solution for medium-sized businesses that want to get started with cloud backup or for enterprises that want to protect branch offices and remote offices with the same level of protection they enjoy in the data center. AltaVault cloud-based appliances on AWS and Azure are designed to offer an efficient and secure approach to backing up cloud-based workloads. Companies without a secondary data center or those looking for a low-cost tertiary recovery site also can use them for disaster recovery purposes.

NetApp Integrated Data Protection (IDP) Solutions

NetApp Integrated Data Protection (IDP) Solutions, embedded within the ONTAP operating system, ensure customer data is available when and where it’s needed. Customers can scale their NetApp data protection capabilities across applications, virtual infrastructures, and cloud architectures.

With IDP, customers lower their cost by purchasing and maintaining fewer systems for data protection. They benefit from controlled data access with secure multi-tenancy and military-grade (AES-256) encryption and proven key-management solutions.

In November 2015, NetApp announced SnapCenter software, a new offering that helps enterprises simplify management of application-specific data protection at scale. Enabling efficient copies is a key element of data protection in the hybrid cloud, spanning backup, restore and disaster recovery of primary data. The new software allows customers to consolidate and centralize the backup and cloning of multiple applications and multiple servers into one efficient operations center. In March 2016, we added incremental improvements to support not only SQL applications, but also Oracle Database on Linux.

Business Continuity and High-Availability Solutions include:

·SnapMirror® data replication technology which provides disaster recovery protection and simplifies the management of data replication. SnapMirror for SVM adds the functionality to replicate NetApp Storage Virtual Machines (SVM), enabling customers to establish consistent replication policies for all volumes within an SVM.

·MetroCluster™ continuous-availability and disaster recovery software which delivers zero data loss, transparent failover protection, and nondisruptive upgrades at distances up to up to 300km.

Disk-to-Disk Backup and Recovery Solutions include:

·SnapVault® software which speeds and simplifies backup and data recovery, protecting data at the block level.

·SnapRestore® data recovery software which uses stored Data ONTAP Snapshot copies to recover anything from a single file to multi-terabyte volumes, in seconds.

Application-Aware Backup and Recovery Solutions for Application and Backup Administrators include:

·The SnapManager® and SnapDrive management software family which streamlines storage management and simplifies configuration, backup, and restore operations with deep application integration.

Compliance includes:

·SnapLock® compliance software which is a flexible data permanence solution for meeting strict data retention regulations or internal IT governance policies.

OnCommand® Management Software and Management Integration Tools

The NetApp OnCommand storage management software portfolio incorporates a broad range of data management tools for NetApp and multivendor storage. These products help our customers’ transition to the hybrid cloud. They improve visibility and allow customers to manage, monitor, and optimize their hybrid cloud environments. The portfolio includes:

·OnCommand Cloud Manager which provides a simplified management interface for NetApp Cloud ONTAP service and NetApp Private Storage (NPS) for Cloud solutions. It allows customers to manage and track cloud resources within AWS, and provision and monitor Cloud ONTAP instances from one central console, including establishing replication relationships.

·OnCommand Workflow Automation which improves productivity by automating repeatable manual storage-management processes. It enables users to construct, customize, publish, and activate a broad range of storage workflows, including one-click automation and deployment of applications from VMware®, Oracle®, Microsoft®, SAP®, Citrix and others. It lowers the cost of storage management while fostering the use of best practices.

·OnCommand Unified Manager which provides a single dashboard to confirm the health of clustered Data ONTAP storage availability, capacity, performance and data protection relationships. It integrates with OnCommand Workflow Automation to automate storage tasks and data protection processes.

·OnCommand System Manager, developed for midsize organizations or smaller environments within larger enterprises and service providers, which delivers device-level management for NetApp AFF, FAS and other ONTAP based storage systems. It is optimized for IT generalists who need streamlined management, an easy-to-use interface, and best-practice workflows.

·OnCommand Insight storage resource management which provides end-to-end multivendor storage management, with a view of performance metrics, including application, datastore, virtual machine, and storage infrastructure performance. It enables customers to improve capacity planning, accelerate consolidation projects, and meet internal business reporting expectations. This innovative tool also allows users to discover orphaned and underutilized storage and detect risks to their environments.

FlexArray® Storage Virtualization Software

FlexArray software enables FAS8000 systems to virtualize existing EMC, HP, Hitachi, and NetApp E-Series arrays to unify and streamline IT operations. It helps customers implement a software-defined storage strategy across heterogeneous storage assets by accelerating provisioning and data management. Customers can transform existing arrays to create storage that spans private, public, and hybrid clouds. It reduces capacity requirements on arrays by more than 35% and increases the usefulness of current storage.

NetApp Private Storage (NPS) for Cloud

NetApp Private Storage for Cloud is a family of enterprise storage solutions that lets customers use multiple industry-leading clouds and maintain complete control over their data on dedicated storage systems from NetApp. In this approach, customer data resides on NetApp storage “next to”, rather than “in”, the cloud provider’s environment. The customer-owned NetApp system is co-located in data centers managed by our partner, Equinix, which has data centers located next to major networks and in close proximity to major cloud providers including AWS, Microsoft Azure and IBM SoftLayer.

NPS for Cloud eliminates time-consuming, costly data migrations. Customers can turn off connectivity to one cloud and connect to another in minutes, without having to move their data.

OpenStack® Contributions

NetApp is a Gold Member of the OpenStack Foundation, a global collaboration which supports the creation of an open-source cloud operating system. OpenStack is a global collaboration of developers and cloud computing technologists producing a ubiquitous open-source cloud computing platform for public and private clouds.

Cloud services based on OpenStack software, in particular those for enterprise applications, require a robust storage infrastructure that is available, efficient, and protected. NetApp storage integration with OpenStack makes deployment of cloud services simpler, faster, and more scalable. NetApp drivers for OpenStack reduce the integration burden for IT departments deploying cloud services and enable high-value services and tight service-level agreements.

Professional and Support Services

NetApp and our ecosystem of partners deliver a full portfolio of professional and technical services that enable customers to achieve greater business value from NetApp products and solution investments.

Our professional services team and certified services partners have the expertise to assist customers with each phase of their IT lifecycle, from planning next-generation storage systems and deploying new technology to optimizing the operational efficiency of existing infrastructures.

Technical support services ensure our products operate efficiently and benefit from the most up-to-date software to help customers minimize downtime for systems running business-critical applications. Our services organization also provides in-depth guidance and education that include extensive access to our global technical resources and intellectual property. Customers can choose from a number of support options including direct touch, web-based My AutoSupport® service, training on our product and solutions and an active online community of customers.

NetApp utilizes a global, integrated model to provide consistent service delivery and global support during every phase of the customer engagement, including strategy, assessment and analysis, planning and design, installation, implementation, integration, optimization, ongoing support, and remote management and monitoring.

Sales, Principal Markets, and Distribution Channels

We market and sell our products in numerous countries throughout the world. To increase visibility of NetApp in the broader IT segment, we continue to make investments in our multiyear branding and awareness campaigns.

Our diversified customer base spans industry segments and vertical markets such as energy, financial services, government, high technology, internet, life sciences, healthcare services, manufacturing, media, entertainment, animation, video postproduction, and telecommunications. NetApp focuses primarily on the data management and storage markets. We design our products to meet the needs of our broad customer base – from large enterprises to midsize customers.

NetApp uses a multichannel distribution strategy. We sell our products and services to end-user business customers and service providers through a direct sales force and an ecosystem of partners. We work with a wide range of partners for our customers – including technology partners, value-added resellers, system integrators, OEMs, service providers and distributors. During fiscal 2016, sales through our indirect channels represented 77% of our net revenues. Our global partner ecosystem is critical to NetApp’s growth and success. We are continually strengthening existing partnerships and investing in new ones to ensure we are meeting the evolving needs of our customers.

As of April 29, 2016, our worldwide sales and marketing functions consisted of approximately 5,260 managers, sales representatives, and technical support personnel. We have field sales offices in approximately 45 countries. Sales to customers Arrow Electronics, Inc. and Avnet, Inc., which are distributors, accounted for 22% and 19% of our net revenues, respectively, in fiscal 2016. Information about sales to and accounts receivables from our major customers, segment disclosures, foreign operations, and net sales attributable to our geographic regions is included in Note 16 – Segment, Geographic, and Significant Customer Information of the Notes to Consolidated Financial Statements.

Seasonality

We have historically experienced a decline in revenues in the first quarter of our fiscal year, as the sales organization spends time developing new business after higher close rates in the fourth quarter, and because sales to European customers are historically weaker during the summer months. During the second quarter of our fiscal year, we have historically experienced increased sales, driven by the government sector, concurrent with the end of the U.S. federal government’s fiscal year in September, as well as an increase in business from European markets. We derive a majority of our revenue in any given quarter from orders booked in the same quarter. Bookings and revenues typically follow intra-quarter seasonality patterns weighted toward the back end of the quarter.

Backlog

We manufacture products based on a combination of specific order requirements and forecasts of our customers’ demand. Orders are generally placed by customers on an as-needed basis. A substantial portion of our products is sold on the basis of standard purchase orders that are cancellable prior to shipment without penalty. In certain circumstances, purchase orders are subject to change with respect to quantity of product or timing of delivery resulting from changes in customer requirements. Our business is characterized by seasonal and intra-quarter variability in demand, as well as short lead times and product delivery schedules. Accordingly, backlog at any given time might not be a meaningful indicator of future revenue.

Manufacturing and Supply Chain

We have outsourced manufacturing operations to third parties located in Memphis, Tennessee; San Jose, California; Guadalajara, Mexico; San Antonio, Texas; Schiphol Airport, The Netherlands; Komarom and Tiszaujvaros, Hungary; Wuxi and Tianjin, China; Taoyuan City, Taiwan; and Singapore. These operations include materials procurement, commodity management, component engineering, test engineering, manufacturing engineering, product assembly, product assurance, quality control, final test, and global logistics. We rely on a limited number of suppliers for materials, as well as several key subcontractors for the production of certain subassemblies and finished systems. We use multiple vendors and have our products manufactured in a number of locations wherever possible to mitigate our supply chain risk. Our strategy has been to develop close relationships with our suppliers, maximizing the exchange of critical information and facilitating implementation of joint quality programs. We use contract manufacturers for the production of major subassemblies and final system configuration. This manufacturing strategy minimizes capital investments and overhead expenditures while creating flexibility for rapid expansion.

We were recently recertified to International Organization for Standardization (ISO) 9001:2008 and ISO 14001:2004 certifications on October 8, 2015, and continue to be ISO 9001 and ISO 14001 certified.

Research and Development

We conduct research and development activities in various locations throughout the world. Total research and development expenses were $861 million, $920 million and $918 million in fiscal 2016, 2015 and 2014, respectively. These costs consist primarily of personnel and related costs incurred to conduct product development activities. Although we develop many of our products internally, we may acquire technology through business combinations or through licensing from third parties when appropriate. We believe that technical leadership is essential to our success, and we expect to continue to commit substantial resources to research and development.

Competition

We compete with many companies in the markets we serve, including established public companies, newly public companies with a strong flash focus, and new market entrants addressing the growing opportunity for hyperconverged systems. Some offer a broad spectrum of IT products and services (full-stack vendors) and others offer a more limited set of storage and data management products or services.

Technology trends, such as the emergence of hosted (or cloud) storage, software as a service (SaaS) and flash storage are driving significant changes in storage architectures and solution requirements. Cloud service providers, led by AWS, provide customers storage as an operating expense, rather than storage systems capital expenditure, for the customers’ data centers, which competes with more traditional storage offerings. While the short- and long-term impact of these evolving trends cannot be predicted, NetApp is confident that our customers recognize the value in our cloud strategy. Our strategy includes building relationships with these new classes of providers, and to date, we have established relationships with more than 300 cloud service providers and hyperscaler providers, including AWS, Google, IBM SoftLayer and Microsoft Azure.

The competitive storage landscape was further disrupted in 2015 by the October 2015 announcement that privately held Dell Inc. planned to acquire publicly traded EMC Corporation, one of our primary competitors. As of this filing, that transaction is still pending regulatory and shareholder approvals. Also in October 2015, HP split its business into two entities, one of which, HP Enterprise, continues to focus on the storage marketplace and compete with NetApp. Another competitor, Pure Storage, went public in October 2015.

In addition to the competitors above, we compete against HDS, IBM, Kaminario, Nimble Storage, Nimbus Data, Tegile, Tintri and Violin Memory. In the OEM market we compete against many of those same companies, as well as Seagate. Our current and potential competitors may establish cooperative relationships among themselves or with third parties, including some of our partners. It is possible that new competitors or alliances among competitors might emerge and rapidly acquire significant market share.

We consider innovation and our technology partnerships key to our competitive differentiation. We believe our competitive advantage also includes the nature of the relationships we form with our customers and partners worldwide. We strive to deliver an outstanding experience in every interaction we have with our customers and partners through our product, service, and support offerings, which enable us to provide our customers with a full range of expertise before, during, and after their purchase.

Proprietary Rights

Over the years, NetApp has been widely recognized for its innovation including recognition as one of the “World’s Most Innovative Companies” (Forbes®), a top 300 United States patent holder (Intellectual Property Owners Association) and one of the best “Quality Over Quantity” patent portfolios in its industry (IEEE Spectrum®). We generally rely on patent, copyright, trademark, trade secret and contract laws to establish and maintain our proprietary rights in our technology and products. While our intellectual property rights are important to our success, we believe that our business as a whole is not materially dependent on any particular patent, trademark, copyright, license or other intellectual property right. We have been granted or own by assignment

over 1,900 patents issued by, and have over 680 patent applications pending with, the U.S. Patent and Trademark Office, as well as a corresponding number of international patents and patent applications. While the durations of our patents vary, we believe that the durations of our patents are adequate relative to the expected lives of our products.

NetApp, the NetApp logo, Active IQ, AltaVault, ASUP, AutoSupport, Campaign Express, Cloud ONTAP, clustered Data ONTAP, Customer Fitness, Data ONTAP, DataMotion, Element, Fitness, Flash Accel, Flash Cache, Flash Pool, FlashRay, FlexArray, FlexCache, FlexClone, FlexPod, FlexScale, FlexShare, FlexVol, FPolicy, Fueled by SolidFire, GetSuccessful, Go Further, Faster, LockVault, Manage ONTAP, Mars, MetroCluster, MultiStore, NetApp Insight, OnCommand, ONTAP, ONTAPI, RAID DP, RAID-TEC. SANtricity, SecureShare, Simplicity, Simulate ONTAP, SnapCenter, Snap Creator, SnapCopy, SnapDrive, SnapIntegrator, SnapLock, SnapManager, SnapMirror, SnapMover, SnapProtect, SnapRestore, Snapshot, SnapValidator, SnapVault, SolidFire, SolidFire Helix, Helix Design, StorageGRID, Tech OnTap, Unbound Cloud, WAFL and other names are trademarks or registered trademarks of NetApp Inc., in the United States and/or other countries.

We generally enter into confidentiality agreements with our employees, resellers, customers, and suppliers. In addition, through various licensing arrangements, we receive certain rights to intellectual property of others. We expect to maintain current licensing arrangements and to secure licensing arrangements in the future, as needed and to the extent available on reasonable terms and conditions, to support continued development and sales of our products and services. Some of these licensing arrangements require or might require royalty payments and other licensing fees. The amount of these payments and fees might depend on various factors, including but not limited to the structure of royalty payments; offsetting considerations, if any; and the degree of use of the licensed technology.

The industry in which we compete is characterized by rapidly changing technology, a large number of patents, and frequent claims and related litigation regarding intellectual property rights, and we may be exposed to various risks related to such claims or legal proceedings. If we are unable to protect our intellectual property, we might be subject to increased competition that could materially and adversely affect our operating results.

Environmental Disclosure

We are committed to the success of our customers and partners, to delivering value to our stockholders, and to positively affecting the communities where our employees work and live. We firmly believe that we can accomplish these objectives concurrently with our commitment to sustainability. We are committed to the prevention of pollution; efficient use of natural resources; and minimizing, relative to the growth of the company, the environmental impacts from our operations, products, and services, as well as complying with laws and regulations related to these areas. Our environmental management system provides the framework for setting, monitoring, and continuously improving our environmental goals and objectives.

We are voluntarily measuring, monitoring, and publicly reporting our scope 1 and scope 2 greenhouse gas emissions and participate in the Carbon Disclosure Project (CDP). The CDP is a global standardized mechanism by which companies report their greenhouse gas emissions to institutional investors. We have established employee commuter programs and education and awareness campaigns, and we continuously seek to optimize the energy efficiency of our buildings, labs, and data centers. At both the global and regional/state levels, various laws and regulations have been implemented or are under consideration to mitigate the effects of climate change caused by greenhouse gas emissions. Environmental laws are complex, change frequently, and have tended to become more stringent over time. It is often difficult to estimate the future impact of environmental matters. Based on current information, we believe that our primary risk related to climate change is the risk of increased energy costs. We are not subject to a cap and trade system or any other mitigation measures that would be material to our operations in the near future. Additionally, we have implemented disaster recovery and business resiliency measures to mitigate the physical risks our facilities, business, and supply chain might face as a consequence of severe weather-/climate-related phenomena such as earthquakes, floods, droughts, and other such natural occurrences.

We are also subject to other federal, state, and local regulations regarding workplace safety and protection of the environment. Various international, federal, state, and local provisions regulate the use and discharge of certain hazardous materials used in the manufacture of our products. Failure to comply with environmental regulations in the future could cause us to incur substantial costs or subject us to business interruptions. We believe we are substantially compliant with all applicable environmental laws. All of our products meet the requirements of the Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH); Waste Electrical and Electronic Equipment (WEEE); Restriction of Hazardous Substances (RoHS); and China RoHS directives. We have maintained an environmental management system since December 2004. As part of ISO 14001 requirements, we set local environmental performance goals such as reducing energy use per square foot and minimizing waste generated on site, that are aligned with our overall corporate strategy. We also conduct an annual review and third-party verified audits of our operations, and we monitor environmental legislation and requirements to help make sure we are taking necessary measures to remain in compliance with applicable laws, not only in our operations but also for our products.

Employees

As of April 29, 2016, we had approximately 12,030 employees, (including approximately 1,110 employees who have been notified that their employment is being terminated as part of our March 2016 restructuring plan) of which 5,260 were in sales and marketing, 1,250 were in customer support, 3,050 were in research and development, 190 were in manufacturing operations and 1,170 were in finance and administration. None of our employees are represented by a labor union and we consider relations with our employees to be good. Competition for technical personnel in the industry in which we compete is intense. We believe that our future success depends in part on our continued ability to hire, assimilate, and retain qualified personnel. To date, we believe that we have been successful in recruiting qualified employees, but there is no assurance that we will continue to be successful in the future.

Executive Officers

Our executive officers and their ages as of June 1, 2016, are as follows:

Name	Age	Position
George Kurian	49	Chief Executive Officer
Ronald J. Pasek	55	Executive Vice President and Chief Financial Officer
Henri Richard	59	Executive Vice President, Worldwide Field and Customer Operations
Joel D. Reich	57	Executive Vice President, Product Operations
Matthew K. Fawcett	48	Senior Vice President, General Counsel and Secretary

George Kurian was appointed chief executive officer on June 1, 2015 and president on May 20, 2016. He joined our board of directors in June 2015. From September 2013 to May 2015, he was executive vice president of product operations, overseeing all aspects of technology strategy, product and solutions development across our product portfolio. Mr. Kurian joined NetApp in April 2011 as the senior vice president of the storage solutions group and was appointed to senior vice president of the Data ONTAP group in December 2011. Prior to NetApp, from 2002 to 2011, Mr. Kurian held several positions at Cisco Systems, including most recently vice president and general manager of the application networking and switching technology group. From 1999 to 2002, Mr. Kurian was the vice president of product management and strategy at Akamai Technologies. Prior to that, he was a management consultant with McKinsey and Company, and led software engineering and product management teams at Oracle Corporation. Mr. Kurian holds a BS degree in electrical engineering from Princeton University and an MBA from Stanford University.

Ronald J. Pasek joined NetApp in April 2016 as executive vice president and chief financial officer, overseeing the finance, customer leasing, workplace resources, internal audit, and IT functions. Mr. Pasek served as senior vice president, finance and chief financial officer of Altera Corporation, a worldwide provider of programmable logic devices, from December 2009 until its acquisition by Intel in December 2015. Mr. Pasek was previously employed by Sun Microsystems, where he most recently served as vice president and corporate treasurer. In his 19 years at Sun Microsystems, he also held a variety of other positions in finance, including vice president of worldwide field finance, worldwide manufacturing, and U.S. field finance. Mr. Pasek is the Chairman of the board of directors of Spectra7 Microsystems Inc., a Canadian publicly traded consumer connectivity company. Mr. Pasek holds a BS degree from San Jose State University and an MBA from Santa Clara University.

Henri Richard joined NetApp in May 2016 as executive vice president of worldwide field and customer operations, leading NetApp’s global field and customer success operations, which supports the company’s ecosystem of channel, alliance, and service partners and perform customer-facing functions. Before joining NetApp, from April 2013 to May 2016, he was senior vice president of worldwide sales and support at SanDisk Corporation. Prior to SanDisk, Mr. Richard served as senior vice president of worldwide sales and marketing at Freescale Semiconductor from September 2007 to April 2013. Mr. Richard brings 30-years of experience serving in global executive roles at companies including Seagate, IBM, WebGain and AMD. He started his career in IT with Informatique Haute Performance in Paris, France, a company he founded. Mr. Richard is a member of the board of directors of Ultratech Inc., a publicly traded advance packaging and laser processing company. Henri holds a bachelor of science degree from the Ecole Nationale de Radiotechnique et d’Electronique Appliquee in Asnieres, France.

Joel D. Reich joined NetApp in 2002 and was appointed executive vice president of product operations in June 2015. He is responsible for overseeing the strategy, development and manufacturing operations of the NetApp product and solutions portfolio. From April 2011 to June 2015, Mr. Reich served as NetApp’s senior vice president of the Hyperscale Storage Group. Before that time, he served in various NetApp Data ONTAP engineering leadership roles. Before joining NetApp, Joel was vice president of marketing and product operations for HighGround Systems, Inc. He also held the position of director of product management at Data General Corporation and EMC Corporation and was director of sales and marketing for Conner Peripherals Storage Systems Group. Mr. Reich holds a bachelor’s degree from Lehigh University.

Matthew K. Fawcett joined the company in September 2010 as senior vice president, general counsel, and secretary. Prior to joining NetApp, from 1999 to August 2010, Mr. Fawcett served in various legal positions at JDS Uniphase Corporation, an optical components company, including as senior vice president, general counsel, and corporate secretary. Prior to joining JDSU, Mr. Fawcett was counsel at Fujitsu and worked in private practice at Morrison & Foerster LLP. Mr. Fawcett is a member of the boards of the Association of Corporate Counsel and the Law Foundation of Silicon Valley. Mr. Fawcett holds a BA degree from the University of California at Berkeley and a JD degree from the University of California at Los Angeles.

Additional Information

Our Internet address is www.netapp.com. We make available through our Internet website our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, amendments to those reports and other documents filed or furnished pursuant to the Exchange Act of 1934, as soon as reasonably practicable after we electronically file such materials with, or furnish them to, the SEC.

The SEC maintains an Internet site (www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. The public also may read and copy these filings at the SEC’s Public Reference Room at 100 F Street N.E., Washington, DC 20549. Information about this Public Reference Room is available by calling (800) SEC-0330.

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The following risk factors and other information included elsewhere in this Annual Report on Form 10-K should be considered and understood in the context of the following risk factors, which describe circumstances that may materially harm our future business, operating results or financial condition. The following discussion reflects our current judgment regarding the most significant risks we face. These risks can and will change in the future.

Our business may be harmed by trends in the storage market or if we are unable to keep pace with rapid industry, technological and market changes.

Our industry and the markets in which we compete have historically experienced significant growth due to the increase in the demand for storage solutions by consumers, enterprises and government bodies around the world, and the resultant purchases of storage solutions to address this demand. However, despite continued data growth, the storage market did not experience growth in calendar years 2013, 2014 or 2015 due to a combination of customers delaying purchases in the face of technology transitions, increased storage efficiency, and changing economic and business environments. At the same time that customers are navigating through their IT transformations, which leverage modern architectures and hybrid cloud environments, they are also reducing IT budgets, looking for simpler solutions, and rethinking how they consume IT. This evaluation is diverting spending towards transformational projects and architectures like flash, hybrid cloud, software as a service, converged infrastructure, and software defined storage. Our business may be adversely impacted if we are unable to keep pace with rapid industry, technological or market changes or if our Data Fabric strategy is not accepted in the marketplace. As a result of these and other factors discussed in the report, our revenue may grow at a slower rate than in past periods, or may decline as it did in fiscal years 2014, 2015 and 2016, on a year-over year basis. The future impact of these trends on both short-term and long-term growth patterns is uncertain. If the general historical rate of industry growth declines, if the growth rates of the specific markets in which we compete decline, and/or if the consumption model of storage changes and our new and existing products and solutions do not receive customer acceptance, our business, operating results and financial condition could suffer.

If we are unable to develop, introduce and gain market acceptance for clustered Data ONTAP-based products or other new products while managing the transition from older products, or if we cannot provide the expected level of quality, service and support for our new products, our business, operating results and financial condition could be harmed.

Our future growth depends upon the successful development and introduction of new hardware and software products. Due to the complexity of storage subsystems and appliances and the difficulty in gauging the engineering effort required to produce new products, such products are subject to significant technical and quality control risks.

We are currently devoting considerable effort and resources to introduce and gain customer acceptance for our clustered Data ONTAP (cDOT)-based products, as well as to develop new generations of our ONTAP products. The cDOT storage operating system is the foundation for data management across flash, disk and cloud storage systems and represents a fundamental and revolutionary change to our solution architecture and to our Data Fabric strategy. Over time, our goal is to replace our Data ONTAP 7-Mode technology with cDOT and new generations of ONTAP. We face considerable challenges as we continue to develop and market cDOT, including, without limitation, cost and complexity associated with migrating customer data and applications from legacy systems to cDOT-based systems, developing additional features for cDOT currently available with Data ONTAP 7-Mode and potentially required by our customers, increasing sales of cDOT through our channel and maintaining service, support and customer relationships as we replace Data ONTAP 7-Mode with cDOT.

If we are unable, for technological, customer reluctance or other reasons, to develop, introduce and gain market acceptance for cDOT and other next-generation ONTAP products, or any new products, as and when required by the market and our customers, our business, operating results and financial condition could be materially and adversely affected.

New or additional product introductions, including new software and flash product offerings, such as Cloud ONTAP, StorageGRID Webscale, all flash FAS, AltaVault, and, with our February 2, 2016 acquisition, SolidFire, subject us to additional financial and operational risks, including our ability to forecast customer preferences and/or demand, our ability to expand production capacity to meet the demand for new products, our ability to successfully manage the transition from older products, and our ability to forecast the impact of customers’ demand for new products or the products being replaced. In addition, as new or enhanced products are introduced, we must also avoid excessive levels of older product inventories and related components and ensure that enough supplies of new products can be delivered to meet customers’ demands. Further risks inherent in new product introductions include the uncertainty of price-performance relative to products of competitors, competitors’ responses to the introductions, delays in sales caused by the desire of customers to evaluate new products for extended periods of time and our partners’ investment in selling our new products. If these risks are not managed effectively, we could experience material risks to our operations, financial condition and business model.

As we enter new or emerging markets, we will likely increase demands on our service and support operations and may be exposed to additional competition. We may not be able to provide products, service and support to effectively compete for these market opportunities.

Our sales and distribution structure makes forecasting revenues difficult and, if disrupted, could harm our operating results.

Our business and sales models make revenues difficult to forecast. We sell to a variety of customers, with a corresponding variety of sales cycles. In addition, the majority of our sales are made and/or fulfilled indirectly through channel partners, including value-added resellers, systems integrators, distributors, original equipment manufacturers (OEMs) and strategic business partners. During fiscal 2016, revenues generated from sales through our indirect channel accounted for 77% of net revenues. This structure significantly complicates our ability to forecast future revenue, particularly within any particular fiscal quarter or year. Moreover, our relationships with our indirect channel partners are critical to our success. The loss of one or more of our key indirect channel partners in a given geographic area or the failure of our channel partners to promote our products could harm our operating results, as qualifying and developing new indirect channel partners typically require a significant investment of time and resources before acceptable levels of productivity are met. If we fail to maintain our relationships with our indirect channel partners, if their financial condition, business or customer relationships were to weaken, if they fail to comply with legal or regulatory requirements, or if we were to cease to do business with them for these or other reasons, our business, operating results and financial condition could be harmed.

Continuing uncertain economic and political conditions restrict our visibility and may harm our operating results, including our revenue growth and profitability.

The continuing global economic uncertainty and political and fiscal chal

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Not applicable.

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We own approximately 1.1 million square feet of facilities at our Sunnyvale, California headquarters. The Sunnyvale site supports research and development, corporate general administration, sales and marketing, global services and operations.

We own approximately 0.8 million square feet of facilities in Research Triangle Park (RTP), North Carolina, of which we occupy approximately 0.5 million square feet. In addition, we own 65 acres of undeveloped land. The RTP site supports research and development, global services and sales and marketing.

We own forty acres of land and approximately 0.3 million square feet of facilities in Wichita, Kansas. This site supports sales and marketing, research and development, and global services.

We lease and occupy approximately 0.4 million square feet of facilities in Bangalore, India. In addition, we own 15 acres of land and 1.0 million square feet of facilities under construction. The Bangalore site supports research and development, marketing and global services.

We lease other sales offices and research and development facilities throughout the U.S. and internationally. We expect that our existing facilities and those being developed worldwide are suitable and adequate for our requirements over at least the next two years and that additional space will be available as needed.

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None.

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Not applicable.

PART II

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The Company’s common stock is traded on the NASDAQ Stock Market LLC (“NASDAQ”) under the symbol NTAP.

Price Range of Common Stock

The price range per share of common stock presented below represents the highest and lowest intraday sales prices for the Company’s common stock on the NASDAQ during each quarter of our two most recent fiscal years.

		Fiscal 2016								Fiscal 2015
		High				Low				High				Low
First Quarter		$	37.07			$	30.25			$	38.21			$	33.34
Second Quarter		$	34.81			$	28.75			$	43.75			$	37.44
Third Quarter		$	34.73			$	20.66			$	43.67			$	38.14
Fourth Quarter		$	27.51			$	20.89			$	39.90			$	34.94

Holders

As of June 10, 2016 there were 511 holders of record of our common stock.

Dividends

The Company paid cash dividends of $0.18 per outstanding common share in each quarter of fiscal 2016 for an aggregate of $210 million, and $0.165 per outstanding common share in each quarter of fiscal 2015 for an aggregate of $208 million.

Performance Graph

The following graph shows a comparison of cumulative total shareholder return, calculated on a dividend reinvested basis, of an investment of $100 for the Company, the S&P 500 Index, the S&P Information Technology Index and the S&P 1500 Technology Hardware & Equipment Index for the five years ended April 29, 2016. The comparisons in the graphs below are based upon historical data and are not indicative of, nor intended to forecast, future performance of our common stock. The graph and related information shall not be deemed “soliciting material” or be deemed to be “filed” with the SEC, nor shall such information be incorporated by reference into any past or future filing with the SEC, except to the extent that such filing specifically states that such graph and related information are incorporated by reference into such filing.

COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN

Among NetApp, Inc., the S&P 500 Index, the S&P Information Technology Index and the S&P 1500 Technology Hardware & Equipment Index*

*$100 invested on April 29, 2011 in stock or index, including reinvestment of dividends. Data points are the last day of each fiscal year for the Company’s common stock and each of the indexes.

		April 2011				April 2012				April 2013				April 2014				April 2015				April 2016
NetApp, Inc.		$	100.00			$	74.90			$	66.92			$	68.20			$	71.65			$	48.11
S&P 500 Index		$	100.00			$	105.16			$	121.27			$	145.85			$	169.15			$	168.63
S&P 500 Information Technology Index		$	100.00			$	115.58			$	113.30			$	142.58			$	177.97			$	175.11
S&P 1500 Technology Hardware & Equipment Index		$	100.00			$	121.21			$	102.04			$	137.21			$	179.24			$	144.44

We believe that a number of factors may cause the market price of our common stock to fluctuate significantly. See Item 1A. – Risk Factors.

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

The following table provides information with respect to the shares of common stock repurchased by us during the three months ended April 29, 2016:

										Total Number of Shares				Approximate Dollar Value
		Total Number				Average				Purchased as Part of				of Shares That May Yet
		of Shares				Price Paid				Publicly Announced				Be Purchased Under The
Period		Purchased				per Share				Program				Repurchase Program
		(Shares in thousands)								(Shares in thousands)				(Dollars in millions)
January 30, 2016 - February 26, 2016			4,531			$	23.19				241,201			$	1,656
February 27, 2016 - March 25, 2016			6,108			$	25.72				247,309			$	1,499
March 26, 2016 - April 29, 2016			—			$	—				247,309			$	1,499
Total			10,639			$	24.64

In May 2003, our Board of Directors approved a stock repurchase program. As of April 29, 2016, our Board of Directors has authorized the repurchase of up to $9.6 billion of our common stock. During fiscal 2016, we repurchased and retired 33 million shares of our common stock for an aggregate purchase price of $960 million. Since inception of the program through April 29, 2016, we repurchased a total of 247 million shares of our common stock for an aggregate purchase price of $8.1 billion. Under this program, we may purchase shares of our outstanding common stock through open market and privately negotiated transactions at prices deemed appropriate by our management. The stock repurchase program may be suspended or discontinued at any time.

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The following selected consolidated financial data set forth below was derived from our historical audited consolidated financial statements and should be read in conjunction with, Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations and Item 8 – Financial Statements and Supplementary Data, and other financial data included elsewhere in this Annual Report on Form 10-K. Our historical results of operations are not indicative of our future results of operations.

		Fiscal Year Ended
		April 29, 2016				April 24, 2015				April 25, 2014				April 26, 2013				April 27, 2012
		(In millions, except per share amounts)
Net revenues		$	5,546			$	6,123			$	6,325			$	6,332			$	6,233
Gross profit		$	3,373			$	3,833			$	3,919			$	3,761			$	3,713
Net income		$	229			$	560			$	638			$	505			$	605
Net income per share, basic		$	0.78			$	1.77			$	1.87			$	1.40			$	1.66
Net income per share, diluted		$	0.77			$	1.75			$	1.83			$	1.37			$	1.58
Shares used in basic computation			294				316				340				362				364
Shares used in diluted computation			297				321				348				368				384
Cash dividends declared per share		$	0.72			$	0.66			$	0.60			$	—			$	—

		April 29, 2016				April 24, 2015				April 25, 2014				April 26, 2013				April 27, 2012
		(In millions)
Cash, cash equivalents and short-term investments		$	5,303			$	5,326			$	5,003			$	6,953			$	5,399
Working capital		$	2,786			$	4,064			$	3,776			$	4,588			$	3,307
Total assets		$	10,037			$	9,401			$	9,214			$	11,235			$	9,527
Total debt		$	2,339			$	1,487			$	990			$	2,252			$	1,202
Total deferred revenue and financed unearned services revenue		$	3,385			$	3,197			$	3,100			$	3,010			$	2,816
Total stockholders' equity		$	2,881			$	3,414			$	3,787			$	4,718			$	4,294

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The following discussion of our financial condition and results of operations should be read together with the financial statements and the accompanying notes set forth under Item 8. – Financial Statements and Supplementary Data. The following discussion also contains trend information and other forward-looking statements that involve a number of risks and uncertainties. The Risk Factors set forth in Item 1A. – Risk Factors are hereby incorporated into the discussion by reference.

Executive Overview

Our Company

We are a leading global provider of software, systems and services to manage and store customer data. We enable enterprises, service providers, governmental organizations, and partners to envision, deploy and evolve their information technology (IT) environments and to reduce costs and risk while driving growth and success for their organizations.

Data management on the hybrid cloud today is essentially a series of isolated siloes. IT organizations need to harmonize the management of data across all cloud providers, as well as on premises. This is what we call the Data Fabric. Our Data Fabric strategy defines the NetApp technology architecture for hybrid cloud. We offer solutions that help customers seamlessly manage their data across their diverse IT resources, spanning flash, disk, and cloud. Customers have the flexibility to choose the right set of resources to meet the needs of their applications and the freedom to change them whenever they want. Customers are entirely in control of their data, regardless of the cloud that it sits on, regardless of the landscape in which it is deployed.

Our data management and storage offerings help improve business productivity, performance and profitability, while providing investment protection and enhanced asset utilization. We complement our enterprise-class storage solutions with services expertise that maximizes the business benefits our customers gain from deploying our products. In fiscal 2016, we focused on our Data Fabric strategy and the strategic solutions that form the foundation of how we enable customer success in the data-powered digital era.

Our unified scale-out fabric-attached storage (FAS) platform is designed to meet the demanding requirements of shared infrastructures and cloud environments. Our FAS storage platform uses the NetApp Data ONTAP storage operating system to deliver integrated data protection, comprehensive data management, and built-in efficiency software for virtualized, shared infrastructures, cloud computing, and mixed workload business applications. We offer hybrid and all-flash configurations of both FAS and E-Series platforms. Our E-Series high-performance storage area network platform is designed to meet demanding performance and capacity requirements of dedicated workloads, while retaining simplicity and an optimized price to performance ratio.

In February 2016, NetApp completed the acquisition of all-flash startup company SolidFire, Inc., which when combined with our existing all-flash offerings, allows us to offer the industry’s broadest portfolio of all-flash solutions. SolidFire systems target a new class of customer who is masterminding the next-generation data center and wants cloud-like capabilities from their on-premises storage for greater flexibility. These users place a priority on the ability to scale simply and seamlessly.

Our configured systems consist of (1) entry level product platform, which consists of our FAS2000 systems, (2) mid-range product platform, which consists of our legacy FAS3000 systems and our new FAS8020 and FAS8040 systems, and (3) high-end product platform, which consists of our legacy FAS6000 systems and our new FAS8060 and FAS8080 systems.

In addition to our products, we provide a variety of services including software maintenance, hardware maintenance and other services including professional services, global support solutions, and customer education and training to help customers most effectively manage their data.

We employ a multichannel distribution strategy, selling products and services to end users and service providers through a direct sales force and through channel partners, including value-added resellers, system integrators, original equipment manufacturers (OEMs) and distributors.

Financial Results and Key Performance Metrics Overview

The following table provides an overview of some of our key financial metrics for each of the last three fiscal years (in millions, except per share amounts, percentages and days sales outstanding):

		Year Ended
		April 29, 2016				April 24, 2015				April 25, 2014
Net revenues		$	5,546			$	6,123			$	6,325
Gross profit		$	3,373			$	3,833			$	3,919
Gross profit margin percentage			61	%			63	%			62	%
Income from operations		$	348			$	716			$	734
Income from operations as a percentage of net revenues			6	%			12	%			12	%
Net income		$	229			$	560			$	638
Diluted net income per share		$	0.77			$	1.75			$	1.83
Operating cash flows		$	974			$	1,268			$	1,350

		April 29, 2016				April 24, 2015
Deferred revenue and financed unearned services revenue		$	3,385			$	3,197
Days sales outstanding (DSO)			54				46

	·	Net revenues: Our net revenues decreased 9% in fiscal 2016 compared to fiscal 2015. This was primarily due to a decrease of 18% in product revenues, which included the impact of foreign currency exchange rate changes, partially offset by a 4% increase in software and hardware maintenance and other services revenues.

	·	Gross profit margin percentage: Our gross profit margin as a percentage of net revenues decreased in fiscal 2016 compared to fiscal 2015 primarily due to a decline in Average Selling Prices (ASPs) largely due to higher discounting and product promotions.

	·	Income from operations as a percentage of net revenues: Our income from operations as a percentage of net revenues decreased in fiscal 2016 compared to fiscal 2015 primarily due to lower product gross margin and restructuring charges.

	·	Net income and Diluted income per share: The 59% and 56% decreases in net income and diluted net income per share, respectively, in fiscal 2016 compared to fiscal 2015 reflect the factors discussed above, as well as an increase in our effective tax rate of 12 percentage points. Partially offsetting these factors, diluted net income per share was favorably impacted by a 7% decrease in the annual weighted average number of dilutive shares, primarily due to share repurchases throughout the year.

	·	Operating cash flows: Operating cash flows decreased $294 million in fiscal 2016, primarily due to lower net income.

	·	Deferred revenue and financed unearned services revenue: Total deferred revenue and financed unearned services revenue increased $188 million, or 6%, in fiscal 2016 compared to fiscal 2015 primarily due to higher software and hardware maintenance contract renewals.

	·	DSO: Days Sales Outstanding (DSO) were 54 in the fourth quarter of fiscal 2016 compared to 46 in the fourth quarter of fiscal 2015 reflecting a higher level of orders in the last month of the fourth quarter in fiscal 2016 than in fiscal 2015.

Acquisition of SolidFire

On February 2, 2016, we acquired all of the outstanding shares of privately-held SolidFire, Inc. (“SolidFire”), a maker of all-fl

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We are exposed to market risk related to fluctuations in interest rates, market prices, and foreign currency exchange rates. We use certain derivative financial instruments to manage foreign currency exchange risks. We do not use derivative financial instruments for speculative or trading purposes. All financial instruments are used in accordance with management-approved policies.

Market Risk and Market Interest Risk

Investment and Interest Income — As of April 29, 2016, we had debt investments of $2.4 billion. Our investment portfolio primarily consists of investments with original maturities greater than three months at the date of purchase, which are classified as available-for-sale investments. These investments, which consist primarily of corporate bonds, U.S. Treasury and government debt securities, commercial paper, and certificates of deposit, are subject to interest rate and interest income risk and will decrease in value if market interest rates increase. Conversely, declines in interest rates, including the impact from lower credit spreads, could have a material adverse impact on interest income for our investment portfolio. A hypothetical 100 basis point increase in market interest rates from levels as of April 29, 2016 would have resulted in a decrease in the fair value of our fixed-income securities of approximately $28 million. Volatility in market interest rates over time will cause variability in our interest income. We do not use derivative financial instruments in our investment portfolio.

Our investment policy is to limit credit exposure through diversification and investment in highly rated securities. We further mitigate concentrations of credit risk in our investments by limiting our investments in the debt securities of a single issuer and by diversifying risk across geographies and type of issuer. We actively review, along with our investment advisors, current investment ratings, company-specific events and general economic conditions in managing our investments and in determining whether there is a significant decline in fair value that is other-than-temporary. We monitor and evaluate our investment portfolio on a quarterly basis for any other-than-temporary impairments.

Debt — As of April 29, 2016, we have outstanding $1.5 billion aggregate principal amount of Senior Notes. We carry these instruments at face value less unamortized discount on our consolidated balance sheets. Since these instruments bear interest at fixed rates, we have no financial statement risk associated with changes in interest rates. However, the fair value of these instruments fluctuates when interest rates change. See Note 10 – Financing Arrangements of the Notes to Consolidated Financial Statements for more information.

Credit Facility and Short-term Loan — We are exposed to the impact of changes in interest rates in connection with our $300 million five-year revolving credit facility and our short-term loan. Borrowings under these arrangements accrue interest at rates that vary based on certain market rates and our credit rating on our Senior Notes. Consequently, our interest expense would fluctuate with any changes in these market interest rates or in our credit rating if we were to borrow any amounts under these arrangements. As of April 29, 2016, no amounts were outstanding under the credit facility and $850 million was outstanding under the short-term loan.

Foreign Currency Exchange Rate Risk

We hedge risks associated with foreign currency transactions to minimize the impact of changes in foreign currency exchange rates on earnings. We utilize foreign currency exchange forward and option contracts to hedge against the short-term impact of foreign currency fluctuations on certain foreign currency denominated monetary assets and liabilities. We also use foreign currency exchange forward contracts to hedge foreign currency exposures related to forecasted sales transactions denominated in certain foreign currencies. These derivatives are designated and qualify as cash flow hedges under accounting guidance for derivatives and hedging.

We do not enter into foreign currency exchange contracts for speculative or trading purposes. In entering into foreign currency exchange forward and option contracts, we have assumed the risk that might arise from the possible inability of counterparties to meet the terms of the contracts. We attempt to limit our exposure to credit risk by executing foreign currency exchange contracts with creditworthy multinational commercial banks. All contracts have a maturity of less than six months. See Note 12 – Derivatives and Hedging Activities of the Notes to Consolidated Financial Statements for more information regarding our derivatives and hedging activities.

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INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Consolidated Balance Sheets as of April 29, 2016 and April 24, 2015	52
Consolidated Statements of Operations for the years ended April 29, 2016, April 24, 2015 and April 25, 2014	53
Consolidated Statements of Comprehensive Income for the years ended April 29, 2016, April 24, 2015 and April 25, 2014	54
Consolidated Statements of Cash Flows for the years ended April 29, 2016, April 24, 2015 and April 25, 2014	55
Consolidated Statements of Stockholders’ Equity for the years ended April 29, 2016, April 24, 2015 and April 25, 2014	56
Notes to Consolidated Financial Statements	57
Selected Quarterly Financial Data (Unaudited)	86
Reports of Independent Registered Public Accounting Firm	87

NETAPP, INC.

CONSOLIDATED BALANCE SHEETS

		April 29, 2016				April 24, 2015
		(In millions, except par value)
ASSETS
Current assets:
Cash and cash equivalents		$	2,868			$	1,922
Short-term investments			2,435				3,404
Accounts receivable			813				779
Inventories			98				146
Other current assets			234				522
Total current assets			6,448				6,773
Property and equipment, net			937				1,030
Goodwill			1,676				1,027
Other intangible assets, net			180				90
Other non-current assets			796				481
Total assets		$	10,037			$	9,401
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable		$	254			$	284
Accrued expenses			765				701
Short-term loan			849				—
Short-term deferred revenue and financed unearned services revenue			1,794				1,724
Total current liabilities			3,662				2,709
Long-term debt			1,490				1,487
Other long-term liabilities			413				318
Long-term deferred revenue and financed unearned services revenue			1,591				1,473
Total liabilities			7,156				5,987
Commitments and contingencies (Note 18)
Stockholders' equity:
Preferred stock, $0.001 par value, 5 shares authorized; no shares issued or outstanding as of April 29, 2016 or April 24, 2015			—				—
Common stock and additional paid-in capital, $0.001 par value, (281 and 306 shares issued and outstanding as of April 29, 2016 and April 24, 2015, respectively)			2,912				3,385
Retained earnings			—				53
Accumulated other comprehensive loss			(31	)			(24	)
Total stockholders' equity			2,881				3,414
Total liabilities and stockholders' equity		$	10,037			$	9,401

See accompanying notes to consolidated financial statements.

NETAPP, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

		Year Ended
		April 29, 2016				April 24, 2015				April 25, 2014
		(In millions, except per share amounts)
Revenues:
Product		$	2,986			$	3,655			$	3,944
Software maintenance			949				899				915
Hardware maintenance and other services			1,611				1,569				1,466
Net revenues			5,546				6,123				6,325
Cost of revenues:
Cost of product			1,558				1,657				1,777
Cost of software maintenance			37				36				31
Cost of hardware maintenance and other services			578				597				598
Total cost of revenues			2,173				2,290				2,406
Gross profit			3,373				3,833				3,919
Operating expenses:
Sales and marketing			1,792				1,913				1,898
Research and development			861				920				918
General and administrative			307				284				281
Restructuring and other charges			108				—				88
Acquisition-related expense			8				—				—
Gain on sale of properties			(51	)			—				—
Total operating expenses			3,025				3,117				3,185
Income from operations			348				716				734
Other income (expense), net			(3	)			(3	)			7
Income before income taxes			345				713				741
Provision for income taxes			116				153				103
Net income		$	229			$	560			$	638
Net income per share:
Basic		$	0.78			$	1.77			$	1.87
Diluted		$	0.77			$	1.75			$	1.83
Shares used in net income per share calculations:
Basic			294				316				340
Diluted			297				321				348

See accompanying notes to consolidated financial statements.

NETAPP, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

.		Year Ended
		April 29, 2016				April 24, 2015				April 25, 2014
		(In millions)
Net income		$	229			$	560			$	638
Other comprehensive income (loss):
Foreign currency translation adjustments			4				(28	)			3
Defined benefit obligations:
Defined benefit obligation adjustments			(7	)			(12	)			1
Reclassification adjustments related to defined benefit obligations			2				—				—
Income tax effect			2				4				—
Unrealized gains (losses) on available-for-sale securities:
Unrealized holding gains (losses) arising during the period			(4	)			2				(2	)
Reclassification adjustments for gains included in net income			(1	)			—				(1	)
Income tax effect			—				—				1
Unrealized gains (losses) on cash flow hedges:
Unrealized holding gains (losses) arising during the period			(4	)			15				(4	)
Reclassification adjustments for (gains) losses included in net income			1				(14	)			2
Other comprehensive loss			(7	)			(33	)			—
Comprehensive income		$	22

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None.

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(a) Evaluation of Disclosure Controls and Procedures

The phrase “disclosure controls and procedures” refers to controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act of 1934, as amended (the Exchange Act), such as this Annual Report on Form 10-K, is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the U.S. Securities and Exchange Commission (SEC). Disclosure controls and procedures are also designed to ensure that such information is accumulated and communicated to our management, including our Chief Executive Officer (CEO) and our Chief Financial Officer (CFO), as appropriate to allow timely decisions regarding required disclosure.

Under the supervision and with the participation of our management, including our CEO and CFO, we carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, as of April 29, 2016, the end of the fiscal period covered by this Annual Report on Form 10-K (the Evaluation Date). Based on this evaluation, our CEO and CFO concluded as of the Evaluation Date that our disclosure controls and procedures were effective such that the information required to be disclosed in our SEC reports (i) is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and (ii) is accumulated and communicated to our management, including our CEO and CFO, as appropriate to allow timely decisions regarding required disclosure.

(b) Management’s Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, our management concluded that, as of April 29, 2016, our internal control over financial reporting was effective at the reasonable assurance level based on those criteria.

The effectiveness of our internal control over financial reporting as of April 29, 2016 has been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report, which is included in Part II, Item 8 of this Annual Report on Form 10-K.

(c) Changes in Internal Control Over Financial Reporting

There has been no change in our internal control over financial reporting identified in connection with our evaluation required by paragraph (d) of rules 13a-15 and 15d-15 under the Exchange Act that occurred during the fourth quarter of fiscal 2016 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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None.

PART III

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The information required by Item 10 with respect to our executive officers is incorporated herein by reference from the information under Item 1 – Business of Part I of this Annual Report on Form 10-K under the section entitled “Executive Officers.” The information required by Item 10 with respect to the Company’s directors and corporate governance is incorporated herein by reference from the information provided under the headings “Election of Directors” and “Corporate Governance,” respectively, in the Proxy Statement for the 2016 Annual Meeting of Stockholders, which will be filed with the Securities and Exchange Commission within 120 days of our year ended April 29, 2016. The information required by Item 405 of Regulation S-K is incorporated herein by reference from the information provided under the heading “Section 16(a) Beneficial Ownership Reporting Compliance” in the Proxy Statement for the 2016 Annual Meeting of Stockholders.

We have adopted a written code of ethics that applies to our Board of Directors and all of our employees, including our principal executive officer and principal financial and accounting officer. A copy of the code of ethics, which we refer to as our “Code of Conduct,” is available on our website at http://investors.netapp.com/governance.cfm. We will post any amendments to or waivers from the provisions of our Code of Conduct on our website.

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Information regarding the compensation of executive officers and directors of the Company is incorporated by reference from the information under the headings “Executive Compensation and Related Information” and “Director Compensation,” respectively, in our Proxy Statement for the 2016 Annual Meeting of Stockholders.

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Information regarding security ownership of certain beneficial owners and management and related stockholder matters is incorporated by reference from the information under the heading “Security Ownership of Certain Beneficial Owners and Management” in our Proxy Statement for the 2016 Annual Meeting of Stockholders.

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Information regarding certain relationships and related transactions and director independence is incorporated by reference from the information under the headings “Corporate Governance” and “Certain Transactions with Related Parties” in our Proxy Statement for the 2016 Annual Meeting of Stockholders.

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The information required by this item is incorporated by reference from the information under the caption “Audit Fees” in our Proxy Statement for the 2016 Annual Meeting of Stockholders.

With the exception of the information incorporated in Items 10, 11, 12, 13 and 14 of this Annual Report on Form 10-K, NetApp’s Proxy Statement is not deemed “filed” as part of this Annual Report on Form 10-K.

PART IV

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(a)	Documents filed as part of this report

(1)	All Financial Statements

See index to Consolidated Financial Statements in Part II, Item 8 of this Form 10-K

(2)	Financial Statement Schedules

All financial statement schedules have been omitted, since the required information is not applicable or is not present in amounts sufficient to require submission of the schedule, or because the information required is included in the consolidated financial statements and notes thereto included in this Form 10-K.

(3)	Exhibits required by Item 601 of Regulation S-K

The information required by this Section (a)(3) of Item 15 is set forth on the exhibit index that follows the Signatures page of this Form 10-K.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

NETAPP, INC.
By:		/s/ GEORGE KURIAN
		George Kurian
		Chief Executive Officer and President (Principal Executive Officer and Principal Operating Officer)
Date: June 22, 2016

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints George Kurian and Ronald J. Pasek, and each of them, as his true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments) to this Annual Report on Form 10-K, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his substitutes, may lawfully do or cause to be done by virtue thereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature		Title		Date
/s/ GEORGE KURIAN		Chief Executive Officer and President (Principal Executive Officer and Principal Operating Officer)		June 22, 2016
George Kurian
/s/ RONALD J. PASEK		Executive Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)		June 22, 2016
Ronald J. Pasek
/s/ T. MICHAEL NEVENS		Chairman of the Board		June 22, 2016
T. Michael Nevens
/s/ JEFFRY R. ALLEN		Director		June 22, 2016
Jeffry R. Allen
/s/ ALAN L. EARHART		Director		June 22, 2016
Alan L. Earhart
/s/ GERALD HELD		Director		June 22, 2016
Gerald Held
/s/ KATHRYN M. HILL		Director		June 22, 2016
Kathryn M. Hill
/s/ GEORGE T. SHAHEEN		Director		June 22, 2016
George T. Shaheen
/s/ STEPHEN M. SMITH		Director		June 22, 2016
Stephen M. Smith
/s/ ROBERT T. WALL		Director		June 22, 2016
Robert T. Wall
/s/ RICHARD P. WALLACE		Director		June 22, 2016
Richard P. Wallace

EXHIBIT INDEX

				Incorporation by Reference
Exhibit No		Description		Form		File No.		Exhibit		Filing Date
3.1		Certificate of Incorporation of the Company, as amended.		10-Q		000-27130		3.1		November 26, 2013
3.2		Bylaws of the Company, as amended.		8-K		000-27130		3.1		February 13, 2014
4.1		Indenture dated December 12, 2012, by and between the Company and U.S. Bank National Association.		8-K		000-27130		4.1		December 12, 2012
4.2		First Supplemental Indenture dated December 12, 2012, by and between the Company and U.S. Bank National Association.		8-K		000-27130		4.2		December 12, 2012
4.3		Underwriting Agreement dated June 2, 2014 by and between the Company and Goldman, Sachs & Co. and J.P. Morgan Securities LLC as Managers of the Underwriters.		8-K		000-27130		1.1		June 5, 2014
4.4		Second Supplemental Indenture dated June 5, 2014 by and between the Company and U.S. Bank National Association.		8-K		000-27130		4.1		June 5, 2014
10.1*		Form of Indemnification Agreement by and between the Company and each of its directors and executive officers.		10-Q		000-27130		10.1		August 28, 2014
10.2*		The Company’s Amended and Restated Change of Control Severance Agreement (CEO).		10-Q		000-27130		10.4		December 2, 2009
10.3*		Form of Amendment to Change of Control Severance Agreement.		10-Q		000-27130		10.1		August 30, 2012
10.4*		Form of Change Control Severance Agreement (Non-CEO Executives).		10-Q		000-27130		10.2		August 30, 2012
10.5*		Form of Amendment No. 1 to Change of Control Severance Agreement.		10-K		000-27130		10.64		June 19, 2012
10.6*		Amendment to Change in Control Agreement dated as of June 23, 2015 by and between the Company and George Kurian.		10-Q		000-27130		10.3		September 8, 2015
10.7*		The Company’s Amended and Restated Executive Compensation Plan, as amended effective July 23, 2014.		DEF 14A		000-27130		Appendix C		July 25, 2014
10.8*		The Company’s Deferred Compensation Plan.		8-K		000-27130		2.1		July 7, 2005
10.9*		The Company’s Amended and Restated Employee Stock Purchase Plan, as amended effective July 27, 2015.		DEF 14A		000-27130		Appendix B		July 27, 2015

				Incorporation by Reference
Exhibit No		Description		Form		File No.		Exhibit		Filing Date
10.10*		The Company’s Amended and Restated 1995 Stock Incentive Plan.		DEF 14A		000-27130				August 21, 1998
10.11*		Form of Stock Option Agreement approved for use under the Company’s amended and restated 1995 Stock Option Plan.		10-K		000-27130		10.21		July 8, 2005
10.12*		Form of Stock Issuance Agreement approved for use under the Company’s amended and restated 1995 Stock Option Plan (Restricted Stock).		10-K		000-27130		10.23		July 8, 2005
10.13*		Form of Stock Option Agreement approved for use under the Company’s amended and restated 1995 Stock Option Plan (Chairman of the Board or any Board Committee Chairperson).		10-K		000-27130		10.22		July 8, 2005
10.14*		The Company’s Amended and Restated 1999 Stock Option Plan, as amended effective July 27, 2015.		DEF 14A		000-27130		Appendix A		July 27, 2015
10.15*		Form of Stock Option Agreement approved for use under the Company’s amended and restated 1999 Stock Option Plan.		10-Q		000-27130		10.3		November 26, 2013
10.16*		Form of Restricted Stock Unit Agreement approved for use under the Company’s amended and restated 1999 Stock Option Plan (Employees).		10-Q		000-27130		10.4		November 26, 2013
10.17*		Form of Stock Option Agreement approved for use under the Company’s amended and restated 1999 Stock Option Plan (Non-Employee Director Automatic Stock Option — Initial).		10-K		000-27130		10.29		July 8, 2005
10.18*		Form of Stock Option Agreement approved for use under the Company’s amended and restated 1999 Stock Option Plan (Non-Employee Director Automatic Stock Option — Annual).		10-K		000-27130		10.28		July 8, 2005
10.19*		Form of Restricted Stock Unit Agreement approved for use under the Company’s amended and restated 1999 Stock Option Plan (Non-Employees Directors).		10-K		000-27130		10.17		June 18, 2010
10.20*		Form of Restricted Stock Unit Agreement (Performance Based) under the NetApp, Inc. 1999 Stock Option Plan.		8-K		000-27130		10.1		June 26, 2015
10.21*		Form of Stock Option Agreement approved for use under the Company’s amended and restated 1999 Stock Option Plan (China).		10-K		000-27130		10.27		July 8, 2005
10.22*		Form of Stock Option Agreement approved for use under the Company’s amended and restated 1999 Stock Option Plan (France).		10-K		000-27130		10.30		July 8, 2005

				Incorporation by Reference
Exhibit No		Description		Form		File No.		Exhibit		Filing Date
10.23*		Form of Stock Option Agreement approved for use under the Company’s amended and restated 1999 Stock Option Plan (India).		10-K		000-27130		10.31		July 8, 2005
10.24*		Form of Stock Option Agreement approved for use under the Company’s amended and restated 1999 Stock Option Plan (United Kingdom).		10-K		000-27130		10.32		July 8, 2005
10.25*		Form of Stock Option Agreement approved for use under the Company’s amended and restated 1999 Stock Option Plan (Israel).		10-K		000-27130		10.81		June 24, 2008
10.26*		Form of Stock Option Grant Notice and Option Agreement for use under the Decru, Inc. Amended and Restated 2001 Equity Incentive Plan and the 2001 Equity Incentive Plan filed under Attachment II.		S-8		333-128098		99.1		September 2, 2005
10.27*		Form of Stock Option Grant Notice and Option Agreement for use under the Decru, Inc. 2001 Equity Incentive Plan and the 2001 Equity Incentive Plan filed under Attachment II.		S-8		333-128098		99.2		September 2, 2005
10.28*		Form of Restricted Stock Bonus Grant Notice and Agreement under the Decru, Inc. 2001 Equity Incentive Plan.		S-8		333-128098		99.4		September 2, 2005
10.29*		Onaro, Inc. Amended and Restated 2002 Stock Option and Incentive Plan (including Appendix — Israeli Taxpayers).		S-8		333-149375		4.1		February 25, 2008
10.30*		Bycast Inc. 2010 Equity Incentive Plan.		S-8		333-167619		99.1		June 18, 2010
10.31*		Incentive Stock Option Plan of Bycast Inc.		S-8		333-167619		99.2		June 18, 2010
10.32*		ionGrid, Inc. 2013 Equity Incentive Plan.		S-8		333-186967		99.1		February 28, 2013
10.33*		Form of Restricted Stock Unit Agreement under the ionGrid, Inc. 2013 Equity Incentive Plan.		S-8		333-186967		99.2		February 28, 2013
10.32*		Outside Director Compensation Policy.		10-K		000-27130		10.65		June 19, 2012
10.33*		Separation and Release Agreement dated June 1, 2015 by and between the Company and Thomas Georgens.		10-Q		000-27130		10.2		September 8, 2015
10.34*		Retirement and Transition Services Agreement dated April 7, 2016 by and between the Company and Robert Salmon.		—		—		—		—

				Incorporation by Reference
Exhibit No		Description		Form		File No.		Exhibit		Filing Date
10.35*		Offer Letter for employment at the Company to Ronald Pasek, dated March 22, 2016.		—		—		—		—
10.36		Credit Agreement, dated December 21, 2012, by and among the Company, the lenders party thereto, JP Morgan Chase Bank, N.A., as administrative agent, Morgan Stanley Senior Funding, Inc. and Wells Fargo Bank, National Association, as Co-Syndication Agents, and J.P. Morgan Securities LLC, Morgan Stanley Funding, Inc. and Wells Fargo Securities LLC, as Joint Bookrunners and Joint Lead Arrangers.		8-K		000-27130		10.1		December 28, 2012
10.37		Amendment No. 1, dated February 2, 2016, by and among the Company, the lenders party thereto and JP Morgan Chase Bank, N.A., as administrative agent.		8-K		00027130		10.2		February 2, 2016
10.38		Loan Agreement, dated February 2, 2016, by and among the Company, Sonoma Holdings C.V., as assuming borrower, the lenders party thereto and JP Morgan Chase Bank, N.A., as administrative agent.		8-K		000-27130		10.1		February 2, 2016
10.39		Collared Accelerated Share Repurchase Transaction dated as of June 5, 2013, by and between the Company and Goldman, Sachs & Co.		10-Q		000-27130		10.1		November 26, 2013
10.40		Agreement and Plan of Merger, dated as of December 18, 2015, among the Company, Sonoma Merger Corp., SolidFire, Inc. and Shareholder Representative Services LLC.		8-K		000-27130		2.1		December 21, 2015
10.41		Agreement of Purchase and Sale and Joint Escrow Instructions dated as of March 9, 2016 by and between the Company and Google Inc.		—		—		—		—
10.42		First Amendment to Agreement of Purchase and Sale and Join Escrow Instructions dated as of March 11, 2016, by and between the Company and Google Inc.		—		—		—		—
10.43		Second Amendment to Agreement of Purchase and Sale and Join Escrow Instructions dated as of April 8, 2016, by and between the Company and Google Inc.		—		—		—		—
21.1		Subsidiaries of the Company.		—		—		—		—

				Incorporation by Reference
Exhibit No		Description		Form		File No.		Exhibit		Filing Date
23.1		Consent of Independent Registered Public Accounting Firm.		—		—		—		—
24.1		Power of Attorney (see signature page).		—		—		—		—
31.1		Certification of the Chief Executive Officer pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002.		—		—		—		—
31.2		Certification of the Chief Financial Officer pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002.		—		—		—		—
32.1		Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002.		—		—		—		—
32.2		Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002.		—		—		—		—
101.INS		XBRL Instance Document		—		—		—		—
101.SCH		XBRL Taxonomy Extension Schema Document		—		—		—		—
101.CAL		XBRL Taxonomy Calculation Linkbase Document		—		—		—		—
101.DEF		XBRL Taxonomy Extension Definition Linkbase Document		—		—		—		—
101.LAB		XBRL Taxonomy Label Linkbase Document		—		—		—		—
101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document		—		—		—		—

*	Identifies management plan or compensatory plan or arrangement.

†	The schedules and other attachments to this exhibit have been omitted. The Company agrees to furnish a copy of any omitted schedules or attachments to the SEC upon request.