NetApp (NTAP) 10-K risk factor changes: FY2017 vs FY2016

Our business may be harmed by trends in the [added: networked] storage [added: hardware] 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 [added: and data management] solutions by consumers, enterprises and government bodies around the world, and the resultant purchases of storage [added: and data management] solutions to address this demand.

However, despite continued data growth, the [added: networked] storage [added: hardware] market [removed: did not experience growth] [added: experienced a decline] in [added: each of the last two] calendar years [removed: 2013, 2014 or 2015] due to a combination of customers delaying purchases in the face of technology transitions, [added: increasing adoption of Cloud environment built on commodity hardware,] increased storage efficiency, and changing economic and business environments.

[removed: At the same time that] [added: While] 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 [removed: evaluation] [added: evolution] is diverting spending towards transformational projects and architectures like flash, hybrid cloud, [removed: software] [added: IT] as a service, converged infrastructure, and software defined storage.

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 [removed: 2014, 2015] [added: 2015, 2016] and [removed: 2016,] [added: 2017,] on a year-over year basis.

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 [removed: products] [added: products, services] 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 [removed: 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 [removed: products.][added: products and related services.]

Due to the complexity of storage [added: software,] 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.

If we are unable, for technological, customer reluctance or other reasons, to develop, introduce and gain market acceptance for [removed: 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 [removed: Cloud ONTAP, StorageGRID Webscale,] [added: ONTAP Cloud,] all flash FAS, AltaVault, [removed: and, with our February 2, 2016 acquisition,] [added: and] SolidFire, subject us to additional financial and operational risks, including our ability to forecast customer preferences and/or demand, our ability to [removed: expand production capacity to meet the demand for new products, our ability to] successfully manage the transition from older [removed: products,] [added: products] and [added: solutions,] our ability to forecast the impact of customers’ demand for new products [added: and solutions] or the products being [removed: replaced.][added: replaced, and our ability to manage production capacity to meet the demand for new products.]

Further risks inherent in new product [added: and solutions] 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 [removed: products.][added: products and solutions.]

This structure significantly complicates our ability to forecast future revenue, [removed: particularly] [added: especially] within any particular fiscal quarter or year.

The continuing global economic uncertainty and political and fiscal challenges in the United States (U.S.) and abroad have, among other things, limited our ability to forecast future demand for our products, contributed to increased periodic volatility in the computer, [removed: storage,] [added: storage] and networking industries at large, as well as the information technology (IT) market, and could constrain future access to capital for our suppliers, customers and partners.

Consequently, we expect these concerns to challenge our business for the foreseeable future, [removed: and] [added: which could] cause harm to our operating results.

[removed: ·Seasonality,] [added: | | • | Seasonality,] such as our historical seasonal decline in revenues in the first quarter of our fiscal year and seasonal increase in revenues in the second quarter of our fiscal year, with the latter due in part to the impact of the U.S. federal government’s September 30 fiscal year end on the timing of its orders; and [added: |]

[removed: ·Linearity,] [added: | | • | Linearity,] such as our historical intra-quarter bookings and revenue pattern in which a disproportionate percentage of each quarter’s total bookings and related revenue occur in the last month of the quarter. [added: |]

Increased component costs, increased pricing [added: and discounting] pressures, the relative and varying rates of increases or decreases in component costs and product prices, changes in product, software maintenance, hardware maintenance and other services revenue mix or decreased volume could harm our revenues, gross margins or earnings.

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 [removed: hyperconverged] [added: hyper-converged] systems.

Technology trends, such as the emergence of hosted [removed: (or cloud)] [added: or public cloud] storage, [removed: software as a service (SaaS)] [added: SaaS] and flash storage are driving significant changes in storage architectures and solution requirements.

Cloud service [removed: providers, led by AWS,] [added: providers] provide customers storage as an operating expense, rather than [removed: storage systems] [added: as a] capital expenditure, for the customers’ data centers, which meets rapidly evolving business needs and has changed the competitive landscape.

By extending our [removed: flash] [added: flash, converged infrastructure] and [removed: software-defined] [added: cloud] storage offerings, we are competing in new segments with both traditional competitors and new competitors, particularly smaller emerging storage vendors.

For example, in October [removed: 2015,] [added: 2016,] Dell Inc. and EMC Corp. [removed: announced] [added: consummated] their agreement to merge.

A loss, cancellation or delay in purchases by any of these parties has negatively affected us in the past, and in the future [removed: could] [added: could,] negatively affect our revenues.

[removed: ·Limited] [added: - Limited] ability to control the quality, quantity and cost of our products or of their components;

[removed: ·The] [added: - The] potential for binding price or purchase commitments with our suppliers that are higher than market rates;

[removed: ·Limited] [added: - Limited] ability to adjust production volumes in response to our customers’ demand fluctuations;

[removed: ·Labor] [added: - Labor] and political unrest at facilities we do not operate or own;

[removed: ·Geopolitical] [added: - Geopolitical] disputes disrupting our supply chain;

| | [removed: ·] [added: •] | Business, legal compliance, litigation and financial concerns affecting our suppliers or their ability to manufacture and ship our products in the quantities, quality and manner we require; and |

| | [removed: ·] [added: •] | Disruptions due to floods, earthquakes, storms and other natural disasters, particularly in countries with limited infrastructure and disaster recovery resources. |

A significant portion of our operations [removed: are] [added: is] located, and a significant portion of our revenues [removed: are] [added: is] derived, outside of the U.S. In addition, [removed: a substantial portion] [added: most] of our products are manufactured outside of the U.S., and we have research and [removed: development] [added: development, sales] and service centers overseas.

Accordingly, our business and our future operating results could be adversely [removed: affected] [added: impacted] by factors affecting our international [removed: operations, but not experienced in the U.S.,] [added: operations] including, among other things, local political or economic conditions, trade protection and export and import requirements, [added: tariffs,] local labor conditions, transportation costs, government spending patterns, acts of terrorism, international conflicts and natural disasters in areas with limited infrastructure.

These exposures may change over time as business practices evolve, and they could have a material adverse impact on our financial results [removed: and cash flows.]

There can be no assurance that all [removed: of] our employees, contractors and agents, as well as those companies to which we outsource certain of our business operations, will comply with these policies, procedures, laws and/or regulations.

[removed: Any] [added: Changes to any] of these factors could materially impact our operating results.

Future changes in domestic or international tax laws and regulations [added: or a change in how we manage our international operations] could adversely affect our ability to continue to realize these tax benefits.

If the ultimate determination of income taxes or at-source withholding taxes assessed under [removed: the IRS audits or] [added: these] audits [removed: being conducted in any other tax jurisdiction] results in [removed: an amount] [added: amounts] in excess of the tax provision we have recorded or reserved for, our operating results, cash flows and financial condition [removed: would] [added: could] be adversely affected.

For example, in March 2014, May [removed: 2015 and] [added: 2015,] March 2016 [added: and November 2016] we executed restructuring events designed to streamline our business, reduce our cost structure and focus our resources on key strategic opportunities.

Our new consumption based business models may adversely affect our revenues and profitability.

We offer customers a full range of consumption models, including the deployment of our software through our subscription and cloud-based SaaS, and utility pricing and managed services offerings for our hardware and software systems.

These business models continue to evolve, and we may not be able to compete effectively, generate significant revenues or maintain the profitability of our consumption based offerings.

Additionally, the increasing prevalence of cloud and SaaS delivery models offered by us and our competitors may unfavorably impact the pricing of our on-premise hardware and software offerings and could have a dampening impact on overall demand for our on-premise hardware and software product and service offerings, which could reduce our revenues

and profitability, at least in the near term.

If we do not successfully execute our consumption model strategy or anticipate the needs of our customers, our revenues and profitability could decline.

As customer demand for our consumption model offerings increases, we could experience volatility in our reported revenues and operating results due to the differences in timing of revenue recognition between our hardware arrangements and software licenses, (that are generally recognized in full at the time of delivery), relative to our consumption model offering arrangements, (that are generally recognized ratably over the terms of the arrangement).

We incur certain expenses associated with the infrastructure and marketing of our consumption model offerings in advance of our ability to recognize the revenues associated with these offerings.

Also in April 2017, HP Enterprise completed their acquisition of Nimble Storage.

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and cash flows.

We could be subject to additional income tax liabilities.

Except as required under U.S. tax laws, we do not provide for U.S. federal and state income taxes or foreign withholding taxes that may result from future remittances of undistributed earnings of foreign subsidiaries that have not been previously taxed since we intend to invest such undistributed earnings indefinitely outside of the U.S. If our intent changes, or if these funds are needed for our U.S. operations, we would be required to accrue or pay U.S. taxes on some or all of these undistributed earnings, which could have a material impact on our financial results.

In particular, our SaaS business could be subject to stricter obligations and greater fines under the impending enactment of the new European Data Protection Regulation on May 25, 2018.

become more dependent upon the systems and business processes of third-parties.

Credit ratings and pricing of our investments can be negatively affected by liquidity, credit deterioration, financial results, economic risk, political risk, sovereign risk or other factors.

As a result, the value and liquidity of our investments may fluctuate substantially.

Therefore, although we have not recently realized any significant losses on our investments, future fluctuations in their value could result in a significant realized loss.

There are risks associated with our outstanding and future indebtedness.

We may incur additional indebtedness in the future under existing credit facilities and/or entering into new financing arrangements.

Any downgrades from credit rating agencies such as Moody’s Investors Service or Standard & Poor’s Rating Services may adversely impact our ability to obtain additional financing or the terms of such financing and reduce the market capacity for our commercial paper.

Furthermore, if prevailing interest rates or other factors result in higher interest upon any potential future financing, then interest expense related to the refinance indebtedness would increase.

existing and future patents may be challenged.

Our stock price is subject to volatility.

Our stock price is subject to changes in recommendations or earnings estimates by financial analysts, changes in investors' or analysts' valuation measures for our stock, changes in our capital structure, including issuance of additional debt, changes in our credit ratings, our ability to pay dividends and to continue to execute our stock repurchase program as planned and market trends unrelated to our performance.

Furthermore, speculation in the press or investment community about our strategic position, financial condition, results of operations or business can cause changes in our stock price.

These factors, as well as general economic and political conditions and the timing of announcements in the public market regarding new products or services, product enhancements or technological advances by our competitors or us, and any announcements by us of acquisitions, major transactions, or management changes may adversely affect our stock price.

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.

During fiscal 2016, revenues generated from sales through our indirect channel accounted for 77% of net revenues.

Also in October 2015, Hewlett-Packard Company split its business into two entities, one of which, HP Enterprise, continues to focus on the storage marketplace and compete with us.

Changes in our effective tax rate resulting from adverse outcomes from examination of our income tax returns and/or changes in the tax regimes and related government policies and regulations in the countries in which we operate could adversely affect our results.

We have not provided for U.S. federal and state income taxes or foreign withholding taxes that may result from future remittances of undistributed earnings of foreign subsidiaries.

President Obama and the U.S. Congress have called for comprehensive tax reform which, among other things, might change certain U.S. tax rules impacting the way U.S. based multinationals are taxed on foreign income.

Additionally, on October 5, 2015, the Organisation for Economic Co-operation and Development (OECD), an international association of 34 countries, including the U.S., released the final reports from its Base Erosion and Profit Shifting (BEPS) Action Plans.

The BEPS recommendations covered a number of issues, including country-by-country reporting, permanent establishment rules, transfer pricing rules and tax treaties.

On October 21, 2015, the European Commission (EC) concluded its investigations into tax ruling practices of certain European Union (EU) member countries.

The EC concluded that certain member countries had granted unlawful rulings that artificially reduced tax burdens and has ordered the recovery of the unpaid taxes.

Future tax reform resulting from these developments may result in changes to long-standing tax principles, which could adversely affect our effective tax rate or result in higher cash tax liabilities.

The U.S. and foreign tax authorities have questioned our intercompany transfer pricing arrangements during these audits.

In recent years, several other U.S. companies have had their transfer pricing arrangements challenged as part of Internal Revenue Service (IRS) examinations, which have resulted in material proposed assessments and/or litigation with respect to those companies.

measures are breached as a result of third-party action, employee error, malfeasance, stolen or fraudulently obtained log-in credentials or otherwise, our reputation could be damaged, our business may be harmed and we could incur significant liabilities.

business information systems.

Our failure to pay quarterly dividends to our stockholders and/or to fully consummate our stock repurchase program could cause the market price of our stock to decline significantly.

A significant part of our investment portfolio consists of U.S. government securities.

If global credit experiences prolonged periods of decline, or if there is a downgrade of U.S. government debt, our investment portfolio may be adversely impacted and we could determine that some of our investments have experienced an other-than-temporary decline in fair value, requiring impairment charges that could adversely affect our financial results.

If we default under our debt obligations, including our Senior Notes, our business, operating results and financial condition will be harmed.

Moreover, covenants associated with our Senior Notes and credit facilities may unduly restrict our business.

We have also established a revolving credit facility under which we may borrow an aggregate amount outstanding at any time of $300 million, under which we had no borrowings outstanding as of April 29, 2016.

On February 2, 2016, we entered into an $870 million unsecured term loan, the proceeds of which were used to finance our acquisition of SolidFire, Inc., under which we had borrowings of $850 million principal amount outstanding as of April 29, 2016.

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 [removed: days sales outstanding):][added: cash conversion cycle):]

| | | April [removed: 29, 2016] [added: 28, 2017] | | | | April [removed: 24, 2015] [added: 29, 2016] | | | | April [removed: 25, 2014] [added: 24, 2015] | | |

| Net revenues | | $ | [removed: 5,546] [added: 5,519] | | | $ | [removed: 6,123] [added: 5,546] | | | $ | [removed: 6,325] [added: 6,123] | |

| Gross profit | | $ | [removed: 3,373] [added: 3,390] | | | $ | [removed: 3,833] [added: 3,373] | | | $ | [removed: 3,919] [added: 3,833] | |

| Gross profit margin percentage | | | 61 | % | | | [removed: 63] [added: 61] | % | | | [removed: 62] [added: 63] | % |

| Income from operations | | $ | [removed: 348] [added: 665] | | | $ | [removed: 716] [added: 348] | | | $ | [removed: 734] [added: 716] | |

| Income from operations as a percentage of net revenues | | | [removed: 6] [added: 12] | % | | | [removed: 12] [added: 6] | % | | | 12 | % |

| Net income | | $ | [removed: 229] [added: 509] | | | $ | [removed: 560] [added: 229] | | | $ | [removed: 638] [added: 560] | |

| Diluted net income per share | | $ | [removed: 0.77] [added: 1.81] | | | $ | [removed: 1.75] [added: 0.77] | | | $ | [removed: 1.83] [added: 1.75] | |

| Operating cash flows | | $ | [removed: 974] [added: 986] | | | $ | [removed: 1,268] [added: 974] | | | $ | [removed: 1,350] [added: 1,268] | |

| [added: (In days)] | | April [added: 28, 2017 | | | | April] 29, 2016 | | | | April 24, 2015 | | |

| Deferred revenue and financed unearned services revenue | | $ | [removed: 3,385] [added: 3,342] | | | $ | [removed: 3,197] [added: 3,385] | |

| Days sales outstanding [removed: (DSO)] [added: (1)] | | | [added: 45 | | | |] 54 | | | | 46 | |

| | [removed: ·] [added: •] | Net revenues: Our net revenues [removed: decreased 9%] [added: were relatively flat] in fiscal [removed: 2016] [added: 2017] compared to fiscal [removed: 2015.] [added: 2016.] This was primarily due to [removed: a decrease] [added: an increase] of [removed: 18%] [added: 1%] in product revenues, [removed: which included the impact of foreign currency exchange rate changes,] partially offset by a [removed: 4% increase] [added: 2% decrease] in software and hardware maintenance and other services revenues. |

[removed: | | · |] Gross profit [removed: margin percentage: Our gross profit margin] as a percentage of net revenues decreased [removed: in] [added: 2 percentage points during] fiscal 2016 compared to fiscal [removed: 2015 primarily] [added: 2015, reflecting lower margins on product revenues,] due to [removed: a decline in Average Selling Prices (ASPs) largely due] [added: primarily] to higher discounting and product [removed: promotions. |][added: promotions which resulted in the decline in ASPs that outpaced the decline in unit materials costs.]

| | [removed: ·] [added: •] | Income from operations as a percentage of net revenues: Our income from operations as a percentage of net revenues [removed: decreased] [added: increased] in fiscal [removed: 2016] [added: 2017] compared to fiscal [removed: 2015] [added: 2016] primarily due to lower [removed: product gross margin and restructuring charges.] [added: operating expenses resulting from our cost reduction initiatives.] |

| | [removed: ·] [added: •] | Net income and Diluted income per share: The [removed: 59%] [added: 122%] and [removed: 56% decreases] [added: 135% increases] in net income and diluted net income per share, respectively, in fiscal [removed: 2016] [added: 2017] compared to fiscal [removed: 2015] [added: 2016] reflect the factors discussed above, as well as [removed: an increase] [added: a decrease] in our effective tax rate of [removed: 12] [added: 10] percentage points. [removed: Partially offsetting these factors, diluted] [added: Diluted] net income per share was favorably impacted by a [removed: 7%] [added: 5%] decrease in the annual weighted average number of dilutive shares, primarily due to share [removed: repurchases throughout the year.] [added: repurchases.] |

| | [removed: ·] [added: •] | Deferred revenue and financed unearned services [removed: revenue: Total deferred] revenue [removed: and financed unearned services revenue] increased [removed: $188] [added: $186] million, [removed: or 6%, in fiscal 2016 compared to fiscal 2015] primarily due to [removed: higher software and hardware] [added: an increase in] maintenance [added: services] contract renewals. |

During fiscal [removed: 2016,] [added: 2017,] we repurchased [removed: 33] [added: 22] million shares of our common stock at an average price of [removed: $28.80] [added: $32.72] per share, for an aggregate of [removed: $960] [added: $705] million.

We also declared cash dividends of an aggregate of [removed: $0.72] [added: $0.76] per share in fiscal [removed: 2016,] [added: 2017,] for which we paid an aggregate of [removed: $210] [added: $208] million.

[removed: In February 2016,] [added: During the third quarter of fiscal 2017,] we [removed: committed to] [added: announced] a restructuring and reduction in workforce to streamline our business and reduce operating expenses.

In connection with these actions, we reduced our worldwide headcount by approximately [removed: 11%,] [added: 6%,] and incurred [removed: $80 million of employee severance] [added: aggregate] charges [removed: in the fourth quarter] of [removed: fiscal 2016.][added: approximately $52 million, primarily related to employee terminations.]

| [removed: ·] [added: •] | We establish VSOE of selling price using the price charged for a deliverable when sold separately and generally evidenced by a substantial majority of historical stand-alone transactions falling within a reasonably narrow range. In addition, we consider major service type, customer type, and other variables in determining VSOE. Our revenue estimates and assumptions are based on our ability to assert and maintain VSOE. ESP is generally evidenced by a majority of historical transactions falling within a reasonable price range. We also consider multiple factors, including, but not limited to, cost of products, gross margin objectives, historical pricing practices, customer type and distribution channels. Our revenue estimates and assumptions are based on our ability to maintain consistent ESP. | | [removed: ·] [added: •] | As our business and offerings evolve over time, modifications to our pricing and discounting methodologies, changes in the scope and nature of service offerings and/or changes in customer segmentation may result in a lack of consistency required to establish and/or maintain VSOE or to maintain consistent ESP. Additionally, technological changes resulting in variability in product costs and gross margins may require changes to our ESP model. Changes in ESP may result in a different allocation of revenue to the deliverables in multiple-element arrangements. These factors, among others, may adversely impact the amount of revenue and gross margin we report in a particular period. |

| [removed: ·] [added: •] | Sales returns are estimated based on historical sales returns, current trends and our expectations regarding future experience. Additionally, distributors and partners participate in various marketing and other programs, and we maintain estimated accruals and allowances for these programs based on contractual terms and historical experience. | | [removed: ·] [added: •] | If there is insufficient relevant historical data for determining our sales returns estimates, or if we experience changes in practices related to sales returns or changes in market or competitive conditions resulting in higher than expected return rates, or if actual credits received by our distributors and partners deviate significantly from our estimates, our revenues may be adversely impacted. |

Inventories consist primarily of purchased components and finished goods and are stated at the lower of cost or [removed: market,] [added: net realizable value,] which approximates actual cost on a first-in, first-out basis.

| [removed: ·] [added: •] | We periodically perform an excess and obsolete analysis of our inventory. Inventories are written down based on excess and obsolete reserves determined primarily on assumptions about future demand forecasts and market conditions. At the point of the loss recognition, a new, lower cost basis for that inventory is established, and subsequent changes in facts and circumstances do not result in the restoration or increase in that newly established cost basis. | | [removed: ·] [added: •] | Although we use our best estimates to forecast future product demand, any significant unanticipated changes in demand or obsolescence related to technological developments, new product introductions, customer requirements, competition or other factors could have a significant impact on the valuation of our inventory. If actual market conditions are less favorable than those projected, additional write-downs and other charges against earnings that adversely impact gross margins may be required. If actual market conditions are more favorable, we may realize higher gross profits in the period when the written-down inventory is sold. We are subject to a variety of environmental laws relating to the manufacture of our products. If there are changes to the current regulations, we may be required to make product design changes which may result in excess or obsolete inventory, which could adversely impact our operating results. |

| [removed: ·] [added: •] | We make commitments to our third-party contract manufacturers and other suppliers to manage lead times and meet product forecasts and to other parties to purchase various key components used in the manufacture of our products. We establish accruals for estimated losses on non-cancelable purchase commitments when we believe it is probable that the components will not be utilized in future operations. | | [removed: ·] [added: •] | If the actual materials demand is significantly lower than our forecast, we may be required to increase our recorded liabilities for estimated losses on non-cancelable purchase commitments which would adversely impact our operating results. |

We review goodwill for impairment annually and whenever events or changes in circumstances indicate the carrying amount of a reporting unit may [removed: be less than] [added: exceed] its fair value.

The provisions of the accounting standard for goodwill allow us to first assess qualitative factors to determine whether it is necessary to perform the [removed: two-step] quantitative goodwill impairment test.

For our annual goodwill impairment test in the fourth quarter of fiscal [removed: 2016,] [added: 2017,] we performed a quantitative test at the reporting unit level and determined the fair value substantially exceeded the carrying amount of each reporting unit and, therefore, found no impairment of goodwill.

| [removed: ·] [added: •] | The assessment of fair value for goodwill and purchased intangible assets is based on factors that market participants would use in an orderly transaction in accordance with the accounting guidance for the fair value measurement of nonfinancial assets. The valuation of purchased intangible assets is principally based on estimates of the future performance and cash flows expected to be generated by the acquired assets from the acquired business. | | [removed: ·] [added: •] | While we employ experts to determine the acquisition date fair value of acquired intangibles, the fair values of assets acquired and liabilities assumed are based on significant management assumptions and estimates, which are inherently uncertain and highly subjective and as a result, actual results may differ from estimates. If different assumptions were to be used, it could materially impact the purchase price allocation. |

| [removed: ·] [added: •] | Evaluations of possible goodwill and purchased intangible assets impairment require us to make judgments and assumptions related to the allocation of our balance sheet and income statement amounts and estimate future cash flows and fair market values of our reporting units and assets. | | [removed: ·] [added: •] | In response to changes in industry and market conditions, we could be required to strategically realign our resources and consider restructuring, disposing of, or otherwise exiting businesses, which could result in an impairment of goodwill or purchased intangible assets. Assumptions and estimates about expected future cash flows and the fair values of our [removed: goodwill] [added: reporting units] and purchased intangible assets are complex and subjective. They can be affected by a variety of factors, including external factors such as the adverse impact of unanticipated changes in macroeconomic conditions and technological changes or new product introductions from competitors. They can also be affected by internal factors such as changes in business strategy or in forecasted product life cycles and roadmaps. Our ongoing consideration of these and other factors could result in future impairment charges or accelerated amortization expense, which could adversely affect our operating results. |

| [removed: ·] [added: •] | Estimated future software and hardware warranty costs are based on historical and projected warranty claim rates, product failure rates, historical and projected materials and logistics costs, distribution and labor costs and knowledge of specific product failures that are outside of our typical experience. We also evaluate our estimates to assess the adequacy of our warranty liability considering the size of the installed base of products subject to warranty protection and adjust the estimates as necessary. | | [removed: ·] [added: •] | Although we engage in product quality programs and processes, if we experience unexpected quality issues resulting in higher failure rates or experience increases in costs to remediate product failures, additional warranty costs may be incurred. Additionally, for new products our warranty liability is based on limited historical experience. If our projections differ from such limited experience, our warranty costs may increase, which could adversely impact our gross margins. |

| [removed: ·] [added: •] | The estimated fair value of our debt securities, and the associated accounting for unrealized losses is based on an evaluation of current economic and market conditions, the credit rating of the security’s issuer, the length of time and extent the security’s fair value has been below its amortized cost and our ability and intent to hold the security for a period of time sufficient to allow for anticipated recovery in value. If we determine that an investment has an other-than-temporary decline in fair value, we recognize the investment loss in earnings. | | [removed: ·] [added: •] | The fair value of our investments in debt securities could decrease significantly from uncertainties in the credit and capital markets, credit rating downgrades and/or solvency of the issuer, decreases in the marketability of the [removed: securities or changes in our ability and intent to continue to hold the] securities. If the fair value of our investments decreases significantly [added: and, if because of changes in our ability] and [added: intent to continue to hold the securities or other factors, it] is determined to be other-than-temporary, we may incur impairment charges that could adversely affect our results of operations. |

| [removed: ·] [added: •] | Our income tax provision is based on existing tax law and advanced pricing agreements or letter rulings we have with various tax authorities. | | [removed: ·] [added: •] | Our provision for income taxes is subject to volatility and could be adversely impacted by future changes in existing tax laws, such as a change in tax rate, possible U.S. changes to the taxation of earnings of our foreign subsidiaries, and uncertainties as to future renewals of favorable tax agreements and rulings. |

| [removed: ·] [added: •] | Deferred income taxes have not been provided on the undistributed earnings of foreign subsidiaries because these earnings have been indefinitely reinvested and there is no plan in the foreseeable future to initiate any action that would precipitate the payment of income taxes thereon. | | [removed: ·] [added: •] | We consider the following matters, among others, in evaluating our plans for indefinite reinvestment: the forecasts, budgets and financial requirements of the parent and subsidiaries for both the long and short term; the tax consequences of a decision to reinvest; and any U.S. and foreign government programs designed to influence remittances. If factors change, future income tax expense and payments may differ significantly from the current period and could materially adversely affect our results of operations. |

| [removed: ·] [added: •] | The determination of whether we should record or adjust a valuation allowance against our deferred tax assets is based on assumptions regarding our future profitability. | | [removed: ·] [added: •] | Our future profits could differ from current expectations resulting in a change to our determination as to the amount of deferred tax assets that are more likely than not to be realized. We could adjust our valuation allowance with a corresponding impact to the tax provision in the period in which such determination is made. |

| [removed: ·] [added: •] | The estimates for our uncertain tax positions are based primarily on company specific circumstances, applicable tax laws, tax opinions from outside firms and past results from examinations of our income tax returns. | | [removed: ·] [added: •] | Significant judgment is required in evaluating our uncertain tax positions. Although we believe our reserves are reasonable, no assurance can be given that the final tax outcome or tax court rulings of these matters will not be different from that which is reflected in our historical tax provisions and accruals. |

See Note [removed: 3] [added: 2] – Recent Accounting Standards Not Yet Effective of the Notes to Consolidated Financial Statements for a full description of new accounting pronouncements, including the respective expected dates of adoption and effects on our financial statements.

[removed: Our fiscal] [added: Fiscal] year [removed: 2016] [added: 2016, which] ended on April 29, [removed: 2016 and] [added: 2016,] was a 53-week year.

We are a leader in data insight, access, and control for hybrid cloud environments.

We provide global organizations the ability to manage and share their data across on-premises, private and public clouds.

We, together with our partners, provide a full range of enterprise-class solutions that customers use to modernize their infrastructures, build next generation data centers and harness the power of hybrid clouds.

We continue to pioneer a Data Fabric platform that allows infrastructure experts, cloud architects, developers and CIOs to easily and securely unite and manage data across the widest variety of environments.

To help our customers and partners manage and share their data across on-premises, and private and public clouds, we are focusing on the customer by delivering an exceptional customer experience and becoming their preferred data partner; extending our cloud integration and hybrid cloud leadership through the NetApp Data Fabric platform and expanding our consumption model offerings to match customer needs across cloud and on-premises offerings.

The NetApp Data Fabric is a platform designed to simplify, automate and evolve the management of data.

Data Fabric empowers our customers to seamlessly liberate, integrate and unleash the full potential of their data in a cloud, hybrid and on-premises world.

Built for the challenges and opportunities of the data-centric world, our products and solutions are designed for simplicity and optimized to manage, protect and secure data.

Because our Data Fabric platform is open by design, we can constantly fuel innovation and flexibility.

Our products and solutions portfolio centers on the digital transformation phases through which our customers are progressing: modernizing storage and data management, building next generation data centers and harnessing the power of hybrid cloud.

Our SolidFire All-Flash Arrays deliver fully automated agility and guaranteed application performance at web scale so customers can achieve the next-generation data center.

Flash plays a key role in customers’ digital transformation efforts as they seek to gain advantage through greater speed, responsiveness and value from key business applications, while lowering total cost of ownership.

All-flash array technology is the de facto choice for primary application workloads as customers seek performance and economic benefits by replacing hard disk installations.

With our all-flash array portfolio, including our AFF-Series, EF-Series and SolidFire SF-Series products, we enable customers to modernize storage and data management to boost performance in their traditional data centers, while mapping out their move to a hybrid cloud.

Our 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 to address capacity requirements.

Our hybrid arrays include the FAS series of unified storage systems and the E-Series of block storage offerings.

To provide visibility into our transition from older products to our newer, higher growth products and clarity into the dynamics of our product revenue, we group our products by “Strategic” and “Mature” solutions.

Strategic solutions include Clustered ONTAP, branded E-Series, SolidFire, AltaVault and optional add-on software products.

Mature solutions include 7-mode OnTap, add-on hardware and related operating system (OS) software and original equipment manufacturers (OEM) products.

Both our Mature and Strategic product lines include a mix of disk, hybrid and all flash storage media.

| Cash conversion cycle | | | 15 | | | | 28 | |

| | • | Gross profit margin percentage: Our gross profit margin as a percentage of net revenues was relatively flat in fiscal 2017 compared to fiscal 2016 reflecting a decrease in gross profit margin on product revenues, mostly offset by an increase in gross profit margin on hardware maintenance and other services revenues. |

| | • | Operating cash flows: Operating cash flows were relatively flat in fiscal 2017 compared to fiscal 2016, reflecting higher net income, mostly offset by changes in operating assets and liabilities. |

| | • | Deferred revenue and financed unearned services revenue: Total deferred revenue and financed unearned services revenue decreased $43 million, or 1%, as of fiscal 2017 year end compared to fiscal 2016 year end primarily due to lower pricing on maintenance contracts. |

| | • | Cash Conversion Cycle: Our cash conversion cycle was 15 days in the fourth quarter of fiscal 2017, compared to 28 days in the corresponding period of fiscal 2016, reflecting lower Days Sales Outstanding and higher Days Payables Outstanding, partially offset by higher Days Inventory Outstanding. |

These activities have been substantially completed.

Commercial Paper Program

In December 2016, we entered into a commercial paper program, under which we may issue unsecured commercial paper notes, with the aggregate face or principal amount of the notes outstanding at any time not to exceed $600 million.

As of April 28, 2017, we had $500 million of principal amount in commercial paper notes outstanding.

Gross profit margins increased on hardware maintenance and other services due the achievement of a lower cost structure resulting from our recent cost reduction initiatives.

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

Product revenues as a percent of net revenues increased 1 percentage point in fiscal 2017 compared to fiscal 2016.

| | | 2017 | | | | 2016 | | | | 2015 | | |

| | | | Fiscal Year | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

Product revenues from strategic solutions represented 66% of product revenues in fiscal 2017, compared to 56% in fiscal 2016.

Product revenues from mature solutions represented 34% of product revenues, in fiscal 2017, compared to 44% in fiscal 2016.

Total product revenues from strategic solutions totaled $1,971 million in fiscal 2017, reflecting a 17% increase from $1,682 million in fiscal 2016.

This increase was primarily due to a 15% increase in unit volume of Clustered ONTAP systems, partially offset by a decrease in ASP reflecting higher discounting and promotional programs.

Total product revenue from mature solutions totaled $1,035 million in fiscal 2017, reflecting a 21% decrease from $1,304 million in fiscal 2016, primarily due to a 57% decrease in unit volume of 7-mode systems, as well as a decrease in ASP.

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.

We offer hybrid and all-flash configurations of both FAS and E-Series platforms.

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.

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

| | · | 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-flash storage systems based in Colorado, for $850 million in cash.

This acquisition extends our position in the all-flash array market by adding new flash offerings that will enhance our ability to deliver customers all-flash storage with a webscale architecture that simplifies data center operations and enables rapid deployments of new applications.

In connection with this acquisition, we entered into an $870 million short-term loan that we expect to repay in full with our global earnings by the beginning of our third quarter of fiscal 2017.

The reduction in workforce will be executed through the end of the second quarter of fiscal 2017.

In May 2015, we committed to a restructuring event and reduction in workforce of approximately 3% of our worldwide headcount, for which we recognized charges of $28 million, primarily in the first quarter of fiscal 2016.

These activities were substantially completed in the second quarter of fiscal 2016.

Real Estate Transactions

On April 19, 2016, we sold certain buildings and land in Sunnyvale, California which had a net book value of $118 million at the time of sale, for $250 million in cash.

Certain of the properties did not qualify as sales under accounting standards due to continuing involvement related to leaseback arrangements.

The remaining properties, which had a net book value of $51 million and related sales proceeds of $102 million, were recognized as sales, resulting in a gain of $51 million.

| | | Year Ended | | | | | | | | | | | |

Gross profit margins on product revenues in fiscal 2015 were relatively flat compared to fiscal 2014 primarily due to lower ASPs for configured systems being offset by lower unit materials cost due to changes in product mix.

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

Product revenues comprised 54% of net revenues for fiscal 2016, compared to 60% of net revenues for fiscal 2015.

Product revenues comprised 60% of net revenues for fiscal 2015, compared to 62% of net revenues for fiscal 2014.

Total configured system revenues of $1,885 million decreased by $328 million, or 15%, and systems unit volume decreased by 3% in fiscal 2016, compared to fiscal 2015.

Revenues and unit volume decreased from FAS entry level and mid-range systems, partially offset by an increase in revenues and unit volume from FAS high-end systems and E-Series systems (which include our all flash EF systems).

ASPs decreased across all FAS systems and E-Series systems platforms due primarily to a combination of higher discounting and product promotions introduced in fiscal 2016.

ASPs were also impacted by unfavorable foreign exchange rates, which had an unfavorable impact of approximately 4%, and unfavorable customer and product mix.

As a result, overall ASPs of configured systems were lower in fiscal 2016 compared to fiscal 2015.

We are exposed to market risk related to fluctuations in interest [removed: rates, market prices,] [added: rates] and foreign currency exchange rates.

[removed: Market Risk and Market] Interest [added: Rate] Risk

[removed: Investment and Interest] [added: Fixed] Income [added: Investments] — As of April [removed: 29, 2016,] [added: 28, 2017,] we had [added: fixed income] debt investments of [removed: $2.4] [added: $2.6] billion.

A hypothetical 100 basis point increase in market interest rates from levels as of April [removed: 29, 2016] [added: 28, 2017] would have resulted in a decrease in the fair value of our fixed-income securities of approximately [removed: $28] [added: $39] million.

Debt — As of April [removed: 29, 2016,] [added: 28, 2017,] we have outstanding $1.5 billion aggregate principal amount of Senior Notes.

Credit Facility [removed: and Short-term Loan] — We are exposed to the impact of changes in interest rates in connection with our [removed: $300] [added: $600] million five-year revolving credit [removed: facility and our short-term loan.][added: facility.]

Borrowings under [removed: these arrangements] [added: the facility] 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 [removed: these arrangements.][added: the credit facility.]

As of April 28, 2017, no amounts were outstanding under the credit facility.

As of April 29, 2016, no amounts were outstanding under the credit facility and $850 million was outstanding under the short-term loan.

Customer [added: Business and IT] Needs

Flash plays a key role in customers’ [removed: IT] [added: digital] transformation efforts as they seek to gain advantage through greater speed, [removed: responsiveness,] [added: responsiveness] and value from key business applications, while [removed: substantially] lowering total cost of ownership.

All-flash array technology is [removed: becoming] the de facto [removed: technology] [added: choice] for primary application workloads as customers [removed: look to realize] [added: seek] performance and economic benefits by replacing hard disk [removed: installations with flash.][added: installations.]

With a highly differentiated and [removed: complete] [added: broad] portfolio of all-flash [added: and hybrid] array offerings, NetApp is well positioned to enable customers to accomplish this transition.

NetApp believes that the hybrid cloud [removed: will become] [added: is fast becoming] the dominant model for enterprise [removed: IT for years to come.][added: IT.]

[removed: We enable] [added: Our Data Fabric platform enables] our customers to manage, [removed: secure,] [added: secure] and protect their data [removed: across flash, disk, and] [added: from on-premises to] public [removed: and private cloud resources,] [added: to hybrid clouds,] all at the scale needed to accommodate the exponential data growth of the digital world.

[removed: All Flash] [added: All-Flash] Arrays

[removed: The AFF series incorporates] [added: Through] FlashEssentials software optimizations, [removed: which] [added: we] increase flash performance and efficiency.

[removed: FlashEssentials is included in the ONTAP operating system, which underpins the Data Fabric,] AFF models can be ordered as standalone systems and [removed: in FlexPod] as a converged infrastructure validated [removed: designs.][added: design.]

NetApp SANtricity Plug-Ins for Microsoft, Oracle, [removed: Splunk,] [added: 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 [removed: application.][added: application, reducing the total cost of ownership by eliminating the need to manually compile critical information from several different tools.]

Hybrid [added: Flash] 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 [removed: (HDDs)] to address capacity requirements.

Backed by one of the most successful alliances in the industry, FlexPod [removed: over the past five years] has become the converged infrastructure of choice for many of the largest enterprises around the globe.

These solutions are designed and validated to reduce deployment time, project [removed: risk,] [added: risk] and the cost of IT.

The portfolio is validated with leading hypervisors, operating systems, systems management [removed: tools,] [added: tools] and cloud management [removed: platforms.][added: platforms for major enterprise workloads such as Oracle, SAP, Microsoft, Openstack and Docker.]

[removed: Data] ONTAP Storage Operating System

It [removed: will simplify] [added: simplifies] customers’ [removed: IT] [added: digital] transformations to [removed: modern] [added: next generation] data centers and hybrid cloud environments.

Customers can choose the architecture of their [removed: choice,] [added: choice] (engineered systems, software-defined [removed: storage,] [added: storage] or [removed: cloud,)] [added: cloud),] all with industry-leading efficiency, [removed: performance,] [added: performance] and density for flash environments; rapid and simplified deployment; and greater data protection and security.

[removed: The NetApp] SANtricity [removed: operating system] provides superior performance, [removed: reliability,] [added: reliability] and data protection for application-driven workloads that run on NetApp EF-Series and E-Series platforms.

Installed on [removed: a] [added: over one] million systems worldwide, the SANtricity OS is field-proven.

[removed: The] [added: In April 2016, we announced the] newest release of the SANtricity OS, [removed: announced in April 2016, is] optimized for the new generations of data analytics applications.

NetApp [removed: StorageGRID®] [added: StorageGRID ®] Webscale software allows [removed: organizations] [added: customers] to store and manage massive amounts of data [removed: worldwide,] on premises and in the cloud.

[removed: NetApp enables] [added: With] support for Amazon [removed: Simple Storage Service (S3) as a storage tier to StorageGRID Webscale, providing] [added: S3, OpenStack Swift and NFS/SMB, it provides] a scalable, highly durable object storage solution for [added: primary storage and] long-term archives.

[removed: AltaVault®] [added: AltaVault ®] Cloud-integrated Solutions

AltaVault is offered in three deployment models to meet customer [removed: needs.]

[removed: NetApp Integrated Data Protection (IDP) Solutions, embedded within the] [added: Embedded in] ONTAP [removed: operating system,] [added: 9, our IDP solutions] ensure customer data is available when and where it’s needed.

Customers can scale their NetApp data protection capabilities across applications, virtual [removed: infrastructures,] [added: infrastructures] and cloud architectures.

They [added: additionally] benefit from controlled data access with secure multi-tenancy and military-grade (AES-256) encryption and proven key-management solutions.

[removed: OnCommand®] [added: OnCommand ®] Management Software and Management Integration Tools

They improve visibility and allow customers to manage, [removed: monitor,] [added: monitor] and optimize their hybrid cloud environments.

[removed: FlexArray®] [added: FlexArray ®] Storage Virtualization Software

FlexArray software enables [removed: FAS8000] [added: NetApp] systems to virtualize existing EMC, HP, [removed: Hitachi,] [added: Hitachi] and NetApp E-Series arrays to unify and streamline IT operations.

Customers can transform existing arrays to create storage that spans private, [removed: public,] [added: public] and hybrid clouds.

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 [removed: NetApp.][added: NetApp while achieving the flexibility of the cloud for application and compute resources.]

[removed: OpenStack®] [added: OpenStack ®] Contributions

NetApp storage integration with OpenStack makes deployment of cloud services simpler, [removed: faster,] [added: faster] and more scalable.

Customers can choose from a number of support options including direct touch, web-based My [removed: AutoSupport®] [added: AutoSupport ®] service, training on our product and solutions and an active online community of customers.

To increase visibility of NetApp in the broader IT segment, we continue to make investments in our [removed: multiyear] [added: multi-year] 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 [removed: postproduction,] [added: postproduction] and telecommunications.

We work with a wide range of partners for our [removed: customers –] [added: customers,] including technology partners, value-added resellers, system integrators, OEMs, service providers and distributors.

NetApp ®, Inc. (NetApp, we or us) is a leader in data insight, access and control for hybrid cloud environments.

We provide global organizations the ability to manage and share their data across on-premises, private and public clouds.

We were incorporated in 1992 and are headquartered in Sunnyvale, California.

NetApp, together with our partners, provides a full range of enterprise-class solutions that customers use to modernize their infrastructures, build next generation data centers and harness the power of hybrid clouds.

We continue to pioneer a Data Fabric platform that allows infrastructure experts, cloud architects, developers and CIOs to easily and securely unite and manage data across the widest variety of environments.

In a world where technology is changing our everyday lives, digital transformation tops the strategic agenda in most organizations.

For organizations to be successful in their digital transformations, data must become the lifeblood of an organization, seamlessly flowing through it to optimize operations, create innovative business opportunities and enable new customer touchpoints through technology.

Correspondingly, IT leaders are under tremendous pressure to harness today’s wealth of data and apply it to create new value across the entire organization—all with limited time, skills and budget.

Building a data-centric organization is no small undertaking.

No longer is data locked away on devices hidden behind firewalls.

Instead, it is becoming distributed, dynamic and diverse.

Thriving in this environment requires a holistic approach to data insight, access and control that is secure, efficient, future-proof and provides freedom of choice.

To help our customers and partners manage and share their data across on-premises, and private and public clouds, we are:

| | • | Focusing on the customer by delivering an exceptional customer experience and becoming their preferred data partner; and |

| | • | Extending our cloud integration and hybrid cloud leadership through the NetApp Data Fabric platform and expanding our consumption model offerings to match customer needs across cloud and on-premises offerings. |

| --- | --- | --- |

The NetApp Data Fabric

The NetApp Data Fabric is a platform designed to simplify, automate and evolve the management of data.

Data Fabric empowers our customers to seamlessly liberate, integrate and unleash the full potential of their data in a cloud, hybrid and on-premises world.

Built for the challenges and opportunities of the data-centric world, NetApp products and solutions are designed for simplicity and optimized to manage, protect and secure data.

Because the Data Fabric platform is open by design, we can constantly fuel innovation and flexibility.

Our products and solutions portfolio centers on the digital transformation phases through which our customers are progressing: modernizing storage and data management, building next generation data centers and harnessing the power of hybrid cloud.

Flash

The AFF A-Series All-Flash Arrays supply enterprise class scale-out all flash storage, harnessing the power of ONTAP and OnCommand software to deliver the industry’s most advanced data management and protection, along with high efficiency, performance and availability.

The AFF A-Series is also the fastest enterprise All-Flash storage in the smallest package available in today’s market.

The first generation of our All-Flash Array line, AFF8000 systems delivers all-flash performance with best-in-class data management.

SolidFire All-Flash Arrays deliver fully automated agility and guaranteed application performance at web scale so customers can achieve the next-generation data center.

The NetApp SolidFire SF-Series 19210 decreases the cost of all-flash arrays by offering the highest density and lowest cost per GB/IOPS, making it well suited for heavily virtualized and cloud infrastructures.

EF-Series all-flash arrays deliver fast, consistent response times to accelerate high-performance databases and data analytics.

With our all-flash array portfolio, NetApp is enabling customers to modernize storage and data management to boost performance in their traditional data centers, while mapping out their move to a hybrid cloud.

Hybrid Cloud

ONTAP Cloud

The ONTAP Cloud storage data management service allows customers to build an enterprise storage service on Amazon Web Services (AWS) Elastic Cloud Compute (EC2) with Elastic Block Storage (EBS) with the flexibility to pay for only what a customer needs, when it needs it.

In September 2016, we expanded this to support the Microsoft Azure public cloud.

Whether customers want to move traditional database applications or legacy NAS applications to the cloud, ONTAP Cloud provides the data access, insights and control along the way.

NetApp Cloud Sync

NetApp Cloud Sync hybrid data management Software as a Service (“SaaS”) offering synchronizes customer data seamlessly and securely between on-premises or cloud storage and AWS Simple Storage Service (S3).

Transfer times drop from hours to minutes.

needs.

NetApp Software Portfolio

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.

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.

Hybrid Cloud.

Our Data Fabric strategy enables data management that seamlessly connects disparate clouds and data centers.

Converged Infrastructure.

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.

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 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.

10-K 1 [removed: ntap-10k_20160429.htm] [added: ntap-10k_20170428.htm] 10-K

| [removed: R] [added: ☑] | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |

| | For the fiscal year ended April [removed: 29, 2016] [added: 28, 2017] |

| [removed: £] [added: ☐] | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |

[removed: ][added: ]

Yes [removed: þ] [added: ☑] No [removed: o][added: ☐]

Yes [removed: o] [added: ☐] No [removed: þ][added: ☑]

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. [removed: o]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, [removed: or] a smaller reporting [added: company, or an emerging growth] company.

See the definitions of “large accelerated filer,” “accelerated [removed: filer” and] [added: filer,”] “smaller reporting [added: company,” and “emerging growth] company” in Rule 12b-2 of the Exchange Act.

| Large accelerated filer | | [removed: þ] [added: ☑] | | Accelerated filer | | [removed: o] [added: ☐] |

| Non-accelerated filer | | [removed: o] [added: ☐] | (Do not check if a smaller reporting company) | Smaller reporting company | | [removed: o] [added: ☐] |

The aggregate market value of voting stock held by non-affiliates of the registrant, as of October [removed: 30, 2015,] [added: 28, 2016,] the last business day of the registrant’s most recently completed second fiscal quarter, was [removed: $5,131,692,964] [added: $4,706,796,074] (based on the closing price for shares of the registrant’s common stock as reported by the NASDAQ Global Select Market on that date).

On June [removed: 10, 2016, 280,080,152] [added: 9, 2017, 271,737,598] shares of the registrant’s common stock, $0.001 par value, were outstanding.

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 [removed: 29, 2016.][added: 28, 2017.]

| Item 1 | | [Business](#Item_1_Business) | | [removed: 3] [added: 4] |

| Item 1A | | [Risk Factors](#Item_1A_Risk_Factors) | | [removed: 15] [added: 14] |

| Item 1B | | [Unresolved Staff Comments](#Item_1B_Unresolved_Staff_Comments) | | [removed: 25] [added: 24] |

| Item 2 | | [Properties](#ITEM_2_PROPERTIES) | | [removed: 25] [added: 24] |

| Item 3 | | [Legal Proceedings](#Item_3_Legal_Proceedings) | | [removed: 25] [added: 24] |

| Item 4 | | [Mine Safety Disclosures](#Item_4_Mine_Safety_Disclosures) | | [removed: 25] [added: 24] |

| Item 5 | | [Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](#Item_5_Market_for_Registrants_Common) | | [removed: 26] [added: 25] |

| Item 6 | | [Selected Financial Data](#Item_6_Selected_Financial_Data) | | [removed: 29] [added: 28] |

| Item 7 | | [Management’s Discussion and Analysis of Financial Condition and Results of Operations](#Item_7_MDA) | | [removed: 30] [added: 29] |

| Item 8 | | [Financial Statements and Supplementary Data](#Item_8_Financial_Statements) | | [removed: 51] [added: 50] |

| Item 9 | | [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](#Item_9_Changes_in_and_Disagreements) | | [removed: 89] [added: 88] |

| Item 9A | | [Controls and Procedures](#Item_9A_Controls_and_Procedures) | | [removed: 89] [added: 88] |

| Item 9B | | [Other Information](#Item_9B_Other_Information) | | [removed: 89] [added: 88] |

| Item 10 | | [Directors, Executive Officers and Corporate Governance](#Item_10_Directors_Executive_Officers) | | [removed: 90] [added: 89] |

| Item 11 | | [Executive Compensation](#Item_11_Executive_Compensation) | | [removed: 90] [added: 89] |

| Item 12 | | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](#Item_12_Security_Ownership) | | [removed: 90] [added: 89] |

| Item 13 | | [Certain Relationships and Related Transactions, and Director Independence](#Item_13_Certain_Relationships) | | [removed: 90] [added: 89] |

| Item 14 | | [Principal Accounting Fees and Services](#Item_14_Principal_Accountant_Fees) | | [removed: 90] [added: 89] |

| Item 15 | | [Exhibits, Financial Statement Schedules](#Item_15_Exhibits_Financial_Statement) | | [removed: 90] [added: 89] |

| [Signatures](#SIGNATURES) | | | | [removed: 91] [added: 90] |

| | [removed: ·] [added: •] | our future financial and operating results; |

| | [removed: ·] [added: •] | our strategy; |

| | [removed: ·] [added: •] | our beliefs and objectives for future operations, research and development; |

| | [removed: ·] [added: •] | expectations regarding future product releases, growth and performance; |

| | [removed: ·] [added: •] | political, economic and industry trends; |

Yes ☑ No ☐

Yes ☑ No ☐

| | | | | | | |

| Emerging growth company | | ☐ | | | | |

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Yes ☐ No ☑

| | • | the repayment of our indebtedness; and |

| | • | our ability to expand our total available market and grow our portfolio of products; |

| | • | our ability to successfully execute new business models; |

| --- | --- | --- |

| | · | 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 |

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

We own approximately 0.8 million square feet of facilities in Research Triangle Park (RTP), North [removed: Carolina, of which we occupy approximately 0.5 million square feet.][added: Carolina.]

We [removed: lease and occupy] [added: own] approximately [removed: 0.4] [added: 1.0] 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.

| | | Fiscal [removed: 2016] [added: 2017] | | | | | | | | Fiscal [removed: 2015] [added: 2016] | | | | | | |

| First Quarter | | $ | [removed: 37.07] [added: 26.95] | | | $ | [removed: 30.25] [added: 22.50] | | | $ | [removed: 38.21] [added: 37.07] | | | $ | [removed: 33.34] [added: 30.25] | |

| Second Quarter | | $ | [removed: 34.81] [added: 36.10] | | | $ | [removed: 28.75] [added: 25.82] | | | $ | [removed: 43.75] [added: 34.81] | | | $ | [removed: 37.44] [added: 28.75] | |

| Third Quarter | | $ | [removed: 34.73] [added: 39.00] | | | $ | [removed: 20.66] [added: 30.36] | | | $ | [removed: 43.67] [added: 34.73] | | | $ | [removed: 38.14] [added: 20.66] | |

| Fourth Quarter | | $ | [removed: 27.51] [added: 43.14] | | | $ | [removed: 20.89] [added: 37.48] | | | $ | [removed: 39.90] [added: 27.51] | | | $ | [removed: 34.94] [added: 20.89] | |

As of June [removed: 10, 2016] [added: 9, 2017] there were [removed: 511] [added: 474] holders of record of our common stock.

The Company paid cash dividends of [added: $0.19 per outstanding common share in each quarter of fiscal 2017 for an aggregate of $208 million,] $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.

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 [removed: 29, 2016.][added: 28, 2017.]

[removed: ][added: ]

*$100 invested on April [removed: 29, 2011] [added: 27, 2012] in stock or index, including reinvestment of dividends.

| | | April [removed: 2011 | | | | April] 2012 | | | | April 2013 | | | | April 2014 | | | | April 2015 | | | | April 2016 | | | [added: | April 2017 | | |]

The following table provides information with respect to the shares of common stock repurchased by us during the three months ended April [removed: 29, 2016:][added: 28, 2017:]

As of April [removed: 29, 2016,] [added: 28, 2017,] our Board of Directors has authorized the repurchase of up to $9.6 billion of our common stock.

Since inception of the program through April [removed: 29, 2016,] [added: 28, 2017,] we repurchased a total of [removed: 247] [added: 269] million shares of our common stock for an aggregate purchase price of [removed: $8.1] [added: $8.8] billion.

| NetApp, Inc. | | $ | 100.00 | | | $ | 89.34 | | | $ | 91.05 | | | $ | 95.66 | | | $ | 64.23 | | | $ | 110.78 | |

| S&P 500 Index | | $ | 100.00 | | | $ | 115.32 | | | $ | 138.69 | | | $ | 160.85 | | | $ | 160.35 | | | $ | 189.08 | |

| S&P 500 Information Technology Index | | $ | 100.00 | | | $ | 98.03 | | | $ | 123.36 | | | $ | 153.98 | | | $ | 151.51 | | | $ | 205.08 | |

| S&P 1500 Technology Hardware & Equipment Index | | $ | 100.00 | | | $ | 84.18 | | | $ | 113.20 | | | $ | 147.88 | | | $ | 119.17 | | | $ | 176.51 | |

| January 28, 2017 - February 24, 2017 | | | 345 | | | $ | 40.56 | | | | 266,103 | | | $ | 910 | |

| February 25, 2017 - March 24, 2017 | | | 2,770 | | | $ | 41.87 | | | | 268,873 | | | $ | 794 | |

| March 25, 2017 - April 28, 2017 | | | — | | | $ | — | | | | 268,873 | | | $ | 794 | |

| Total | | | 3,115 | | | $ | 41.72 | | | | | | | | | |

| 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 | |

| 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 | | | | | | | | | |

During fiscal 2016, we repurchased and retired 33 million shares of our common stock for an aggregate purchase price of $960 million.

The following selected consolidated financial data set forth below was derived from our historical audited consolidated financial statements and should be read in conjunction [removed: with,] [added: 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.

| | | April [added: 28, 2017 | | | | April] 29, 2016 | | | | April 24, 2015 | | | | April 25, 2014 | | | | April 26, 2013 | | | [removed: | April 27, 2012 | | |]

| Net revenues | | $ | [removed: 5,546] [added: 5,519] | | | $ | [removed: 6,123] [added: 5,546] | | | $ | [removed: 6,325] [added: 6,123] | | | $ | [removed: 6,332] [added: 6,325] | | | $ | [removed: 6,233] [added: 6,332] | |

| Gross profit | | $ | [removed: 3,373] [added: 3,390] | | | $ | [removed: 3,833] [added: 3,373] | | | $ | [removed: 3,919] [added: 3,833] | | | $ | [removed: 3,761] [added: 3,919] | | | $ | [removed: 3,713] [added: 3,761] | |

| Net income | | $ | [removed: 229] [added: 509] | | | $ | [removed: 560] [added: 229] | | | $ | [removed: 638] [added: 560] | | | $ | [removed: 505] [added: 638] | | | $ | [removed: 605] [added: 505] | |

| Net income per share, basic | | $ | [removed: 0.78] [added: 1.85] | | | $ | [removed: 1.77] [added: 0.78] | | | $ | [removed: 1.87] [added: 1.77] | | | $ | [removed: 1.40] [added: 1.87] | | | $ | [removed: 1.66] [added: 1.40] | |

| Net income per share, diluted | | $ | [removed: 0.77] [added: 1.81] | | | $ | [removed: 1.75] [added: 0.77] | | | $ | [removed: 1.83] [added: 1.75] | | | $ | [removed: 1.37] [added: 1.83] | | | $ | [removed: 1.58] [added: 1.37] | |

| Shares used in basic computation | | | [removed: 294] [added: 275] | | | | [removed: 316] [added: 294] | | | | [removed: 340] [added: 316] | | | | [removed: 362] [added: 340] | | | | [removed: 364] [added: 362] | |

| Shares used in diluted computation | | | [removed: 297] [added: 281] | | | | [removed: 321] [added: 297] | | | | [removed: 348] [added: 321] | | | | [removed: 368] [added: 348] | | | | [removed: 384] [added: 368] | |

| Cash dividends declared per share | | $ | [removed: 0.72] [added: 0.76] | | | $ | [removed: 0.66] [added: 0.72] | | | $ | [removed: 0.60] [added: 0.66] | | | $ | [removed: —] [added: 0.60] | | | $ | — | |

| Cash, cash equivalents and short-term investments | | $ | [removed: 5,303] [added: 4,921] | | | $ | [removed: 5,326] [added: 5,303] | | | $ | [removed: 5,003] [added: 5,326] | | | $ | [removed: 6,953] [added: 5,003] | | | $ | [removed: 5,399] [added: 6,953] | |

| Working capital | | $ | [removed: 2,786] [added: 2,076] | | | $ | [removed: 4,064] [added: 2,786] | | | $ | [removed: 3,776] [added: 4,064] | | | $ | [removed: 4,588] [added: 3,776] | | | $ | [removed: 3,307] [added: 4,588] | |

| Total assets | | $ | [removed: 10,037] [added: 9,493] | | | $ | [removed: 9,401] [added: 10,037] | | | $ | [removed: 9,214] [added: 9,401] | | | $ | [removed: 11,235] [added: 9,214] | | | $ | [removed: 9,527] [added: 11,235] | |

| Total debt | | $ | [removed: 2,339] [added: 1,993] | | | $ | [removed: 1,487] [added: 2,339] | | | $ | [removed: 990] [added: 1,487] | | | $ | [removed: 2,252] [added: 990] | | | $ | [removed: 1,202] [added: 2,252] | |

| Total deferred revenue and financed unearned services revenue | | $ | [removed: 3,385] [added: 3,342] | | | $ | [removed: 3,197] [added: 3,385] | | | $ | [removed: 3,100] [added: 3,197] | | | $ | [removed: 3,010] [added: 3,100] | | | $ | [removed: 2,816] [added: 3,010] | |

| Total stockholders' equity | | $ | [removed: 2,881] [added: 2,780] | | | $ | [removed: 3,414] [added: 2,881] | | | $ | [removed: 3,787] [added: 3,414] | | | $ | [removed: 4,718] [added: 3,787] | | | $ | [removed: 4,294] [added: 4,718] | |

| | | April 28, 2017 | | | | April 29, 2016 | | | | April 24, 2015 | | | | April 25, 2014 | | | | April 26, 2013 | | |

| [Consolidated Balance Sheets as of April [removed: 29, 2016] [added: 28, 2017] and April [removed: 24, 2015](#CONSOLIDATED_BALANCE_SHEETS)] [added: 29, 2016](#CONSOLIDATED_BALANCE_SHEETS)] | [removed: 52] [added: 51] |

| [Consolidated Statements of Operations for the years ended April [removed: 29, 2016,] [added: 28, 2017,] April [removed: 24, 2015] [added: 29, 2016] and April [removed: 25, 2014](#CONSOLIDATED_STATEMENTS_OPERATIONS)] [added: 24, 2015](#CONSOLIDATED_STATEMENTS_OPERATIONS)] | [removed: 53] [added: 52] |

| [Consolidated Statements of Comprehensive Income for the years ended April [removed: 29, 2016,] [added: 28, 2017,] April [removed: 24, 2015] [added: 29, 2016] and April [removed: 25, 2014](#CONSOLIDATED_STATEMENTS_COMPREHENSIVE_IN)] [added: 24, 2015](#CONSOLIDATED_STATEMENTS_COMPREHENSIVE_IN)] | [removed: 54] [added: 53] |

| [Consolidated Statements of Cash Flows for the years ended April [removed: 29, 2016,] [added: 28, 2017,] April [removed: 24, 2015] [added: 29, 2016] and April [removed: 25, 2014](#CONSOLIDATED_STATEMENTS_CASH_FLOWS)] [added: 24, 2015](#CONSOLIDATED_STATEMENTS_CASH_FLOWS)] | [removed: 55] [added: 54] |

| [Consolidated Statements of Stockholders’ Equity for the years ended April [removed: 29, 2016,] [added: 28, 2017,] April [removed: 24, 2015] [added: 29, 2016] and April [removed: 25, 2014](#CONSOLIDATED_STATEMENTS_STOCKHOLDERS_EQU)] [added: 24, 2015](#CONSOLIDATED_STATEMENTS_STOCKHOLDERS_EQU)] | [removed: 56] [added: 55] |

| [Notes to Consolidated Financial Statements](#NOTES_TO_CONSOLIDATED_FINANCIAL_STATEMEN) | [removed: 57] [added: 56] |

| [Selected Quarterly Financial Data (Unaudited)](#SELECTED_QUARTERLY_FINANCIAL_DATA_UNAUDI) | [removed: 86] [added: 85] |

| [Reports of Independent Registered Public Accounting Firm](#REPORT_INDEPENDENT_REGISTERED_PUBLIC_ACC) | [removed: 87] [added: 86] |

| | | April [added: 28, 2017 | | | | April] 29, 2016 | | | | April 24, 2015 | | |

| Cash and cash equivalents | | $ | [removed: 2,868] [added: 2,444] | | | $ | [removed: 1,922] [added: 2,868] | |

| Short-term investments | | | [removed: 2,435] [added: 2,477] | | | | [removed: 3,404] [added: 2,435] | |

| Accounts receivable | | | [removed: 813] [added: 731] | | | | [removed: 779] [added: 813] | |

| Inventories | | | [removed: 98] [added: (65] | [added: )] | | | [removed: 146] [added: 49] | | [added: | | (24 | ) |]

| Other current assets | | | [removed: 234] [added: 383] | | | | [removed: 522] [added: 234] | |

| Total current assets | | | [removed: 6,448] [added: 6,198] | | | | [removed: 6,773] [added: 6,448] | |

| Property and equipment, net | | | [removed: 937] [added: 799] | | | | [removed: 1,030] [added: 937] | |

| Goodwill | | | [removed: 1,676] [added: 1,684] | | | | [removed: 1,027] [added: 1,676] | |

| Other intangible assets, net | | | [removed: 180] [added: 131] | | | | [removed: 90] [added: 180] | |

| Other non-current assets | | | [removed: 796] [added: 681] | | | | [removed: 481] [added: 796] | |

| Total assets | | $ | [removed: 10,037] [added: 9,493] | | | $ | [removed: 9,401] [added: 10,037] | |

| Accounts payable | | $ | [removed: 254] [added: 347] | | | $ | [removed: 284] [added: 254] | |

| Accrued expenses | | | [removed: 765] [added: 782] | | | | [removed: 701] [added: 765] | |

| Short-term loan | | | [removed: 849] [added: —] | | | | [removed: —] [added: 849] | |

| Short-term deferred revenue and financed unearned services revenue | | | [removed: 1,794] [added: 1,744] | | | | [removed: 1,724] [added: 1,794] | |

| Total current liabilities | | | [removed: 3,662] [added: 4,122] | | | | [removed: 2,709] [added: 3,662] | |

| Long-term debt | | | [removed: 1,490] [added: 744] | | | | [removed: 1,487] [added: 1,490] | |

| Other long-term liabilities | | | [removed: 413] [added: 249] | | | | [removed: 318] [added: 413] | |

| Long-term deferred revenue and financed unearned services revenue | | | [removed: 1,591] [added: 1,598] | | | | [removed: 1,473] [added: 1,591] | |

| Total liabilities | | | [removed: 7,156] [added: 6,713] | | | | [removed: 5,987] [added: 7,156] | |

| Preferred stock, $0.001 par value, 5 shares authorized; no shares issued or outstanding as of April [removed: 29, 2016] [added: 28, 2017] or April [removed: 24, 2015] [added: 29, 2016] | | | — | | | | — | |

| Common stock and additional paid-in capital, $0.001 par value, [removed: (281] [added: 885 shares authorized; 269] and [removed: 306] [added: 281] shares issued and outstanding as of April [removed: 29, 2016] [added: 28, 2017] and April [removed: 24, 2015, respectively)] [added: 29, 2016, respectively] | | | [removed: 2,912] [added: 2,769] | | | | [removed: 3,385] [added: 2,912] | |

| Retained earnings | | | [removed: —] [added: 40] | | | | [removed: 53] [added: —] | |

| Accumulated other comprehensive loss | | | [removed: (31] [added: (29] | ) | | | [removed: (24] [added: (31] | ) |

| Total stockholders' equity | | | [removed: 2,881] [added: 2,780] | | | | [removed: 3,414] [added: 2,881] | |

| Total liabilities and stockholders' equity | | $ | [removed: 10,037] [added: 9,493] | | | $ | [removed: 9,401] [added: 10,037] | |

| | | April [removed: 29, 2016] [added: 28, 2017] | | | | April [removed: 24, 2015] [added: 29, 2016] | | | | April [removed: 25, 2014] [added: 24, 2015] | | |

| Product | | $ | [removed: 2,986] [added: 3,006] | | | $ | [removed: 3,655] [added: 2,986] | | | $ | [removed: 3,944] [added: 3,655] | |

| Software maintenance | | | [removed: 949] [added: 965] | | | | [removed: 899] [added: 949] | | | | [removed: 915] [added: 899] | |

| Hardware maintenance and other services | | | [removed: 1,611] [added: 1,548] | | | | [removed: 1,569] [added: 1,611] | | | | [removed: 1,466] [added: 1,569] | |

| Net revenues | | | [removed: 5,546] [added: 5,519] | | | | [removed: 6,123] [added: 5,546] | | | | [removed: 6,325] [added: 6,123] | |

| Commercial paper notes | | | 500 | | | | — | |

| Current portion of long-term debt | | | 749 | | | | — | |

| Net income | | $ | 509 | | | $ | 229 | | | $ | 560 | |

| Gain on sale of properties | | | (10 | ) | | | (51 | ) | | | — | |

| Proceeds from issuance of commercial paper notes, net | | | 499 | | | | — | | | | — | |

| Cumulative-effect of new accounting principle | | | — | | | | (7 | ) | | | 21 | | | | — | | | | 14 | |

| Net income | | | — | | | | — | | | | 509 | | | | — | | | | 509 | |

| Repurchase of common stock | | | (22 | ) | | | (335 | ) | | | (370 | ) | | | — | | | | (705 | ) |

| Balances, April 28, 2017 | | | 269 | | | $ | 2,769 | | | $ | 40 | | | $ | (29 | ) | | $ | 2,780 | |

Description of Business — NetApp, Inc. (we, us, or the Company) provides global organizations the ability to manage and share their data across on-premises, private and public clouds.

Together with our partners, we provide a full range of enterprise-class software, systems and services solutions that customers use to modernize their infrastructures, build next generation data centers and harness the power of hybrid clouds.

Accounting Change — In the first quarter of fiscal 2017, we early adopted a new accounting standards update that the Financial Accounting Standards Board (FASB) issued in March 2016 that simplifies the accounting for certain aspects of stock-based payments to employees.

The new standard requires that certain amendments relevant to us be applied using a modified-retrospective transition method by means of a cumulative-effect adjustment to retained earnings as of the beginning of the period in which the guidance is adopted.

In connection with the adoption, we elected to account for forfeitures as they occur and the cumulative-effect impact of that change in accounting policy was a $7 million increase in retained earnings and a corresponding decrease in additional paid-in capital as of April 30, 2016.

We also recorded a $3 million cumulative-effect adjustment decrease to retained earnings and a related decrease in deferred tax assets related to the forfeiture rate policy change on outstanding stock-based awards as of April 30, 2016.

The standard also eliminates the requirement that excess tax benefits be realized before companies can recognize them.

Accordingly, we recorded a $17 million cumulative-effect adjustment increase in retained earnings and an offsetting increase in deferred tax assets for previously unrecognized excess tax benefits as of April 30, 2016.

The new standard eliminated the requirement to report excess tax benefits and certain tax deficiencies related to share-based payment transactions as additional paid-in capital.

As a result, we recognized $18 million of tax deficiencies in our provision for income taxes, rather than additional paid–in capital, for the year ended April 28, 2017.

We elected to report cash flows related to excess tax benefits on a prospective basis.

The presentation requirements for cash flows related to employee taxes paid for withheld shares had no impact to our statements of cash flows since such cash flows have historically been presented as a financing activity.

The amortization of premiums and discounts on the

Purchased intangible assets with finite lives are amortized on a straight-line basis over their economic lives of three to six years for developed technology, two to eight years for customer contracts/relationships, two to

The impairment loss is measured based on the amount by which the carrying amount of the reporting unit exceeds its fair value, with the recognized loss not to exceed the total amount of goodwill allocated to that reporting unit.

Products shipped with acceptance criteria or return

We account for forfeitures of stock-based awards as they occur.

Revenue from Contracts with Customers

We expect to adopt this accounting standard update in the first quarter of fiscal 2019.

Preliminarily, we plan to adopt the standard using the full retrospective method to restate each prior reporting period presented.

Our ability to adopt this standard using the full retrospective method is dependent upon system readiness, for both revenue and commissions, and the completion of the analysis of information necessary to restate prior period financial statements and disclosures.

We are continuing to assess the impact of this standard on our financial position, results of operations and related disclosures and have not yet determined whether the effect will be material.

We do not expect that the adoption of this standard will have a material impact on our operating cash flows.

Additionally, as we continue to assess the new standard along with industry trends and additional interpretive guidance, we may adjust our implementation plan accordingly.

We believe that the new standard will impact our following policies and disclosures:

| | • | removal of the current limitation on contingent revenue for multiple element arrangements, such as that related to the delivery of additional items or meeting other specified performance conditions, may result in revenue being recognized earlier; |

| | • | estimation of variable consideration for arrangements with contract terms such as rights of return, potential penalties and acceptance clauses; |

| --- | --- | --- |

| | • | required disclosures, including information about the transaction price allocated to remaining performance obligations and expected timing of revenue recognition; and |

| --- | --- | --- |

| | • | accounting for deferred commissions, including costs that qualify for deferral and the amortization period. |

| --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | Year Ended | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Repayment of long-term debt | | | — | | | | — | | | | (1,265 | ) |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Balances, April 26, 2013 | | | 461 | | | $ | 4,740 | | | | (104 | ) | | $ | (2,927 | ) | | $ | 2,896 | | | $ | 9 | | | $ | 4,718 | |

| Conversion of convertible notes | | | 5 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |

| Exercise of convertible note hedges | | | (4 | ) | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |

| Exercise of warrants | | | 1 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |

| Repurchase of common stock and forward contract | | | (47 | ) | | | (813 | ) | | | — | | | | — | | | | (1,068 | ) | | | — | | | | (1,881 | ) |

| Retirement of treasury stock | | | (104 | ) | | | (614 | ) | | | 104 | | | | 2,927 | | | | (2,313 | ) | | | — | | | | — | |

Description of Business —NetApp, Inc. (we, us, or the Company) provides software, systems and services to manage and store computer data.

We enable enterprises, service providers, governmental organizations, and partners to envision, deploy and evolve their information technology environments and to reduce costs and risk while driving growth and success for their organizations.

Our fiscal years 2015 and 2014, ended on April 24, 2015 and April 25, 2014, respectively, were each 52-week years.

Accounting Change — During fiscal 2016, we adopted an accounting standard that simplified the presentation of deferred taxes by requiring deferred tax assets and liabilities to be classified as noncurrent in a classified statement of financial position.

We adopted this accounting standard prospectively.

Accordingly, the prior period amounts in our consolidated balance sheets within this Annual Report on Form 10-K were not adjusted to conform to the new accounting standard.

The performance of the test involves a two-step process.

The second step of the process is only performed if a potential impairment exists, and it involves determining the difference between the fair value of the reporting unit’s net assets other than goodwill and the fair value of the reporting unit.

If that difference is less than the net book value of goodwill, an impairment

exists and is recorded.

the market value of plan assets or the plans' projected benefit obligation on a straight-line basis over the remaining estimated service life of plan participants.

We estimate the number of stock-based awards that will be forfeited due to employee turnover.

Our forfeiture assumption is primarily based on historical experience.

Tax attributes related to the exercise of employee stock options are not realized until they result in a reduction of taxes payable.

We do not include unrealized stock option attributes as components of our gross deferred tax assets and corresponding valuation allowance disclosures.

In March 2016, the FASB issued an accounting standards update that impacts several aspects of the accounting for stock-based awards, including the income tax consequences, classification of awards as either equity or liabilities, and classification of activity in the statement of cash flows.

The standard also provides for the ability to make an entity-wide accounting policy election to either estimate forfeitures, consistent with current GAAP, or to account for forfeitures as they occur.

We are currently evaluating the impact of this new standard on our consolidated financial statements, our planned adoption date, and the method of adoption for each amendment.

SolidFire Acquisition

capabilities.

| Total | | $ | 180 | |

| Inventories | | $ | 98 | | | $ | 146 | |

| Prepaid expenses and other current assets | | $ | 234 | | | $ | 268 | |

| Other current assets | | $ | 234 | | | $ | 522 | |

| | | | 2,191 | | | | 2,223 | |

| Other non-current assets | | $ | 796 | | | $ | 481 | |

Financed unearned services revenue

| | | $ | 2,583 | | | $ | 2,589 | |

| Cash | | $ | 1,666 | | | $ | 1,666 | | | $ | — | |

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 [removed: 29, 2016,] [added: 28, 2017,] the end of the fiscal period covered by this Annual Report on Form 10-K (the Evaluation Date).

Based on this assessment, our management concluded that, as of April [removed: 29, 2016,] [added: 28, 2017,] 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 [removed: 29, 2016] [added: 28, 2017] 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.

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 [removed: 2016] [added: 2017] that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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 [removed: 2016] [added: 2017] Annual Meeting of Stockholders, which will be filed with the Securities and Exchange Commission within 120 days of our year ended April [removed: 29, 2016.][added: 28, 2017.]

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 [removed: 2016] [added: 2017] Annual Meeting of Stockholders.

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 [removed: 2016] [added: 2017] Annual Meeting of Stockholders.

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 [removed: 2016] [added: 2017] Annual Meeting of Stockholders.

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 [removed: 2016] [added: 2017] Annual Meeting of Stockholders.

The information required by this item is incorporated by reference from the information under the caption “Audit Fees” in our Proxy Statement for the [removed: 2016] [added: 2017] Annual Meeting of Stockholders.

| Date: June [removed: 22, 2016] [added: 20, 2017] | | |

| /s/ GEORGE KURIAN | | Chief Executive Officer and President (Principal Executive Officer and Principal Operating Officer) | | June [removed: 22, 2016] [added: 20, 2017] |

| /s/ RONALD J. PASEK | | Executive Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) | | June [removed: 22, 2016] [added: 20, 2017] |

| /s/ T. MICHAEL NEVENS | | Chairman of the Board | | June [removed: 22, 2016] [added: 20, 2017] |

| /s/ JEFFRY R. ALLEN | | Director | | June [removed: 22, 2016] [added: 20, 2017] |

| /s/ ALAN L. EARHART | | Director | | June [removed: 22, 2016] [added: 20, 2017] |

| /s/ GERALD HELD | | Director | | June [removed: 22, 2016] [added: 20, 2017] |

| /s/ KATHRYN M. HILL | | Director | | June [removed: 22, 2016] [added: 20, 2017] |

| /s/ GEORGE T. SHAHEEN | | Director | | June [removed: 22, 2016] [added: 20, 2017] |

| /s/ STEPHEN M. SMITH | | Director | | June [removed: 22, 2016] [added: 20, 2017] |

| /s/ ROBERT T. WALL | | Director | | June [removed: 22, 2016] [added: 20, 2017] |

| /s/ RICHARD P. WALLACE | | Director | | June [removed: 22, 2016] [added: 20, 2017] |

| 3.1 | | [removed: Certificate] [added: [Certificate] of Incorporation of the Company, as [removed: amended.] [added: amended.](http://www.sec.gov/Archives/edgar/data/1002047/000119312513454984/d594786dex31.htm)] | | 10-Q | | 000-27130 | | 3.1 | | November 26, 2013 |

| 3.2 | | [removed: Bylaws] [added: [Bylaws] of the Company, as [removed: amended.] [added: amended.](http://www.sec.gov/Archives/edgar/data/1002047/000119312514051239/d674631dex31.htm)] | | 8-K | | 000-27130 | | 3.1 | | February 13, 2014 |

| 4.1 | | [removed: Indenture] [added: [Indenture] dated December 12, 2012, by and between the Company and U.S. Bank National [removed: Association.] [added: Association.](http://www.sec.gov/Archives/edgar/data/1002047/000119312512500180/d451808dex41.htm)] | | 8-K | | 000-27130 | | 4.1 | | December 12, 2012 |

| 4.2 | | [removed: First] [added: [First] Supplemental Indenture dated December 12, 2012, by and between the Company and U.S. Bank National [removed: Association.] [added: Association.](http://www.sec.gov/Archives/edgar/data/1002047/000119312512500180/d451808dex42.htm)] | | 8-K | | 000-27130 | | 4.2 | | December 12, 2012 |

| 4.3 | | [removed: Underwriting] [added: [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 [removed: Underwriters.] [added: Underwriters.](http://www.sec.gov/Archives/edgar/data/1002047/000119312514227067/d739441dex11.htm)] | | 8-K | | 000-27130 | | 1.1 | | June 5, 2014 |

| 4.4 | | [removed: Second] [added: [Second] Supplemental Indenture dated June 5, 2014 by and between the Company and U.S. Bank National [removed: Association.] [added: Association.](http://www.sec.gov/Archives/edgar/data/1002047/000119312514227067/d739441dex41.htm)] | | 8-K | | 000-27130 | | 4.1 | | June 5, 2014 |

| 10.1* | | [removed: Form] [added: [Form] of Indemnification Agreement by and between the Company and each of its directors and executive [removed: officers.] [added: officers.](http://www.sec.gov/Archives/edgar/data/1002047/000119312514325455/d746932dex101.htm)] | | 10-Q | | 000-27130 | | 10.1 | | August 28, 2014 |

| [removed: 10.7*] [added: 10.3*] | | [removed: The] [added: [The] Company’s Amended and Restated Executive Compensation Plan, as amended effective July 23, [removed: 2014.] [added: 2014.](http://www.sec.gov/Archives/edgar/data/1002047/000119312514280484/d691163ddef14a.htm)] | | DEF 14A | | 000-27130 | | Appendix C | | July 25, 2014 |

| [removed: 10.8*] [added: 10.4*] | | [removed: The] [added: [The] Company’s Deferred Compensation [removed: Plan.] [added: Plan.](http://www.sec.gov/Archives/edgar/data/1002047/000129993305003338/exhibit1.htm)] | | 8-K | | 000-27130 | | 2.1 | | July 7, 2005 |

| [removed: 10.9*] [added: 10.5*] | | [removed: The] [added: [The] Company’s Amended and Restated Employee Stock Purchase Plan, as amended effective July [removed: 27, 2015.] [added: 30, 2016.](http://www.sec.gov/Archives/edgar/data/1002047/000119312516668319/d155048ddef14a.htm)] | | DEF 14A | | 000-27130 | | Appendix B | | [removed: July 27, 2015] [added: August 2, 2016] |

| [removed: 10.10*] [added: 10.6*] | | [removed: The] [added: [The] Company’s Amended and Restated 1995 Stock Incentive [removed: Plan.] [added: Plan.](http://www.sec.gov/Archives/edgar/data/1002047/0000891618-98-004020.txt)] | | DEF 14A | | 000-27130 | | | | August 21, 1998 |

| [removed: 10.11*] [added: 10.7*] | | [removed: Form] [added: [Form] of Stock Option Agreement approved for use under the Company’s amended and restated 1995 Stock Option [removed: Plan.] [added: Plan.](http://www.sec.gov/Archives/edgar/data/1002047/000095013405013074/f10166exv10w21.htm)] | | 10-K | | 000-27130 | | 10.21 | | July 8, 2005 |

| [removed: 10.12*] [added: 10.8*] | | [removed: Form] [added: [Form] of Stock Issuance Agreement approved for use under the Company’s amended and restated 1995 Stock Option Plan (Restricted [removed: Stock).] [added: Stock).](http://www.sec.gov/Archives/edgar/data/1002047/000095013405013074/f10166exv10w23.htm)] | | 10-K | | 000-27130 | | 10.23 | | July 8, 2005 |

| [removed: 10.13*] [added: 10.9*] | | [removed: Form] [added: [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 [removed: Chairperson).] [added: Chairperson).](http://www.sec.gov/Archives/edgar/data/1002047/000095013405013074/f10166exv10w22.htm)] | | 10-K | | 000-27130 | | 10.22 | | July 8, 2005 |

| [removed: 10.14*] [added: 10.10*] | | [removed: The] [added: [The] Company’s Amended and Restated 1999 Stock Option Plan, as amended effective July [removed: 27, 2015.] [added: 30, 2016.](http://www.sec.gov/Archives/edgar/data/1002047/000119312516668319/d155048ddef14a.htm)] | | DEF 14A | | 000-27130 | | Appendix A | | [removed: July 27, 2015] [added: August 2, 2016] |

| [removed: 10.15*] [added: 10.11*] | | [removed: Form] [added: [Form] of Stock Option Agreement approved for use under the Company’s amended and restated 1999 Stock Option [removed: Plan.] [added: Plan.](http://www.sec.gov/Archives/edgar/data/1002047/000119312513454984/d594786dex103.htm)] | | 10-Q | | 000-27130 | | 10.3 | | November 26, 2013 |

| [removed: 10.16*] [added: 10.12*] | | [removed: Form] [added: [Form] of Restricted Stock Unit Agreement approved for use under the Company’s amended and restated 1999 Stock Option Plan [removed: (Employees).] [added: (Employees).](http://www.sec.gov/Archives/edgar/data/1002047/000119312513454984/d594786dex104.htm)] | | 10-Q | | 000-27130 | | 10.4 | | November 26, 2013 |

| [removed: 10.17*] [added: 10.13*] | | [removed: Form] [added: [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 — [removed: Initial).] [added: Initial).](http://www.sec.gov/Archives/edgar/data/1002047/000095013405013074/f10166exv10w29.htm)] | | 10-K | | 000-27130 | | 10.29 | | July 8, 2005 |

| [removed: 10.18*] [added: 10.14*] | | [removed: Form] [added: [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 — [removed: Annual).] [added: Annual).](http://www.sec.gov/Archives/edgar/data/1002047/000095013405013074/f10166exv10w28.htm)] | | 10-K | | 000-27130 | | 10.28 | | July 8, 2005 |

| [removed: 10.19*] [added: 10.15*] | | [removed: Form] [added: [Form] of Restricted Stock Unit Agreement approved for use under the Company’s amended and restated 1999 Stock Option Plan (Non-Employees [removed: Directors).] [added: Directors).](http://www.sec.gov/Archives/edgar/data/1002047/000095012310059271/f56118exv10w17.htm)] | | 10-K | | 000-27130 | | 10.17 | | June 18, 2010 |

| [removed: 10.20*] [added: 10.16*] | | [removed: Form] [added: [Form] of Restricted Stock Unit Agreement (Performance Based) under the NetApp, Inc. 1999 Stock Option [removed: Plan.] [added: Plan.](http://www.sec.gov/Archives/edgar/data/1002047/000119312515237314/d948233dex101.htm)] | | 8-K | | 000-27130 | | 10.1 | | June 26, 2015 |

| [removed: 10.21*] [added: 10.17*] | | [removed: Form] [added: [Form] of Stock Option Agreement approved for use under the Company’s amended and restated 1999 Stock Option Plan [removed: (China).] [added: (China).](http://www.sec.gov/Archives/edgar/data/1002047/000095013405013074/f10166exv10w27.htm)] | | 10-K | | 000-27130 | | 10.27 | | July 8, 2005 |

| [removed: 10.22*] [added: 10.18*] | | [removed: Form] [added: [Form] of Stock Option Agreement approved for use under the Company’s amended and restated 1999 Stock Option Plan [removed: (France).] [added: (France).](http://www.sec.gov/Archives/edgar/data/1002047/000095013405013074/f10166exv10w30.htm)] | | 10-K | | 000-27130 | | 10.30 | | July 8, 2005 |

| [removed: 10.23*] [added: 10.19*] | | [removed: Form] [added: [Form] of Stock Option Agreement approved for use under the Company’s amended and restated 1999 Stock Option Plan [removed: (India).] [added: (India).](http://www.sec.gov/Archives/edgar/data/1002047/000095013405013074/f10166exv10w31.htm)] | | 10-K | | 000-27130 | | 10.31 | | July 8, 2005 |

| [removed: 10.24*] [added: 10.20*] | | [removed: Form] [added: [Form] of Stock Option Agreement approved for use under the Company’s amended and restated 1999 Stock Option Plan (United [removed: Kingdom).] [added: Kingdom).](http://www.sec.gov/Archives/edgar/data/1002047/000095013405013074/f10166exv10w32.htm)] | | 10-K | | 000-27130 | | 10.32 | | July 8, 2005 |

| [removed: 10.25*] [added: 10.21*] | | [removed: Form] [added: [Form] of Stock Option Agreement approved for use under the Company’s amended and restated 1999 Stock Option Plan [removed: (Israel).] [added: (Israel).](http://www.sec.gov/Archives/edgar/data/1002047/000095013408011751/f38790exv10w81.htm)] | | 10-K | | 000-27130 | | 10.81 | | June 24, 2008 |

| [removed: 10.29*] [added: 10.22*] | | [removed: Onaro,] [added: [Onaro,] Inc. Amended and Restated 2002 Stock Option and Incentive Plan (including Appendix — Israeli [removed: Taxpayers).] [added: Taxpayers).](http://www.sec.gov/Archives/edgar/data/1002047/000089161808000116/f38137exv4w1.htm)] | | S-8 | | 333-149375 | | 4.1 | | February 25, 2008 |

| [removed: 10.30*] [added: 10.23*] | | [removed: Bycast] [added: [Bycast] Inc. 2010 Equity Incentive [removed: Plan.] [added: Plan.](http://www.sec.gov/Archives/edgar/data/1002047/000095012310059322/f56136exv99w1.htm)] | | S-8 | | 333-167619 | | 99.1 | | June 18, 2010 |

| 10.2* | | [Form of Change of Control Severance Agreement.](http://www.sec.gov/Archives/edgar/data/1002047/000119312516634733/d198185dex101.htm) | | 8-K | | 000-27130 | | 10.1 | | June 28, 2016 |

| 10.25* | | [SolidFire, Inc. 2010 Stock Incentive Plan.](http://www.sec.gov/Archives/edgar/data/1002047/000119312516467124/d129742dex991.htm) | | S-8 | | 333-209570 | | 99.1 | | February 17, 2016 |

| 10.26* | | [SolidFire, Inc. 2016 Equity Incentive Plan.](http://www.sec.gov/Archives/edgar/data/1002047/000119312516467124/d129742dex992.htm) | | S-8 | | 333-209570 | | 99.2 | | February 17, 2016 |

| 10.31* | | [NetApp, Inc. Executive Retiree Health Plan, as amended and restated.](http://www.sec.gov/Archives/edgar/data/1002047/000119312516773699/d298977dex101.htm) | | 8-K | | 000-27130 | | 10.1 | | November 21, 2016 |

| 10.33 | | [Form of Dealer Agreement between the Company, as issuer, and each Dealer.](http://www.sec.gov/Archives/edgar/data/1002047/000119312516790334/d311449dex102.htm) | | 8-K | | 000-27130 | | 10.2 | | December 12, 2016 |

| | | | | Incorporation by Reference | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Exhibit No | | Description | | Form | | File No. | | Exhibit | | Filing Date |

| | | | | | | | | | | |

| 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 |

| 10.26* | | 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 |

| 10.32* | | 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 |

| 10.37 | | 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 |