NetApp (NTAP) 10-K risk factor changes: FY2020 vs FY2019

As a result of these and other factors discussed in [removed: the] [added: this] report, our revenue may decline on a year-over-year basis, as it did in fiscal years [removed: 2015, 2016] [added: 2016, 2017] and [removed: 2017.][added: 2020.]

The future impact of these trends on both [removed: short-term] [added: short-] and long-term growth patterns is uncertain.

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 [added: 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.]

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

[removed: Also,] [added: For example,] in April 2017, HP Enterprise completed their acquisition of Nimble Storage.

[removed: Continuing] [added: Continuing] uncertain economic and political conditions restrict our visibility and may harm our operating results, including our revenue growth and [removed: profitability.][added: profitability.]

Continuing global economic uncertainty, political conditions and fiscal challenges in the [removed: United States (U.S.)] [added: 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, storage and networking industries at large, as well as the IT market, and could constrain future access to capital for our suppliers, customers and partners.

| | • | 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; [removed: and] |

[removed: If] [added: If] we are unable to maintain and develop relationships with strategic partners, our revenues may be [removed: harmed.][added: harmed.]

A significant portion of our net revenues [removed: are] [added: is] generated through sales to a limited number of customers and distributors.

Our gross margins [added: may] vary.

[removed: Any] [added: Any] disruption to our supply chain could materially harm our business, operating results and financial [removed: condition.][added: condition.]

[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: |]

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

Accordingly, our business and future operating results could be adversely impacted by factors affecting our international operations including, among other things, local political or economic conditions, trade protection and export and import requirements, tariffs, local labor conditions, transportation costs, government spending patterns, acts of terrorism, international conflicts and natural disasters in areas with limited [removed: infrastructure.][added: infrastructure and adverse public health developments.]

In particular, the [added: ongoing COVID-19 pandemic,] current trade tensions between the U.S. and China, including newly imposed [removed: tariffs,] [added: tariffs in 2019,] and the United Kingdom’s [removed: pending] withdrawal from the European Union, [removed: which is now scheduled to be] effective on [removed: October] [added: January] 31, [removed: 2019,] [added: 2020,] could impact our business and operating results.

In addition, due to the global nature of our business, we are subject to complex legal and regulatory requirements in the U.S. and the foreign jurisdictions in which we operate and sell our products, including antitrust and anti-competition laws, rules and regulations, and regulations related to data [removed: privacy.][added: privacy, data protection, and cybersecurity.]

[added: We are also subject to the potential loss of proprietary information due to] piracy, misappropriation, or laws that may be less protective of our intellectual property rights than U.S. laws.

Many countries around the world are beginning to implement legislation and other guidance to align their international tax rules with the Organisation for Economic [removed: Co-operation’s] [added: Co-operation and Development’s] Base Erosion and Profit Shifting recommendations and related action plans that aim to standardize and modernize global corporate tax policy, including changes to cross-border tax, transfer-pricing documentation rules and nexus-based tax incentive practices.

Our effective tax rate could also be adversely affected by different and evolving interpretations of existing law or regulations, which in turn would negatively impact our operating and financial [removed: results as a whole.][added: results.]

Errors or wrongdoing by clients, their customers, or third-party technology providers resulting in [added: actual or perceived] security breaches may [removed: be] [added: result in such actual or perceived breaches being] attributed to us.

A failure or inability to meet our clients’ expectations with respect to security and confidentiality through a disruption in the services provided by these third-party vendors, or the loss [added: or alteration] of data stored by such vendors, could result in financial or reputational harm to our business to the extent that such disruption or loss is caused by, or perceived by our customers to have been caused by, defects in our products.

Moreover, the risk of reputational harm may be magnified and/or distorted through the rapid dissemination of information over the internet, including through news articles, blogs, [removed: chat rooms, and] social [removed: media sites.][added: media, and other online communication forums and services.]

Cybersecurity incidents or other security breaches could result in (1) unauthorized access to, or loss or unauthorized [added: use, alteration, or] disclosure of, such information; (2) litigation, indemnity obligations, government investigations and [added: proceedings, and] other possible liabilities; (3) negative publicity; and (4) disruptions to our internal and external operations.

In addition, a cybersecurity incident or loss of personal [removed: information] [added: information, or other security breach] could result in other negative consequences, including remediation costs, disruption of internal operations, increased cybersecurity protection costs and lost revenues.

[removed: High-profile cyberattacks and security breaches have increased in recent years, and security] [added: Security] industry experts and government officials have warned about the risks of hackers and cyberattacks targeting IT products and businesses.

Moreover, the risk of reputational harm may be magnified and/or distorted through the rapid dissemination of information over the internet, including through news articles, blogs, [removed: chat rooms, and] social [removed: media sites.][added: media, and other online communication forums and services.]

Any security incident, [added: loss of data, or other security breach,] whether actual or perceived, [added: or whether impacting us or our third-party service providers,] could harm our reputation, erode customer confidence in the effectiveness of our data security measures, negatively impact our ability to attract new customers, cause existing customers to elect not to renew their support contracts or their SaaS subscriptions, or subject us to third-party lawsuits, regulatory fines or other action or liability, which could materially and adversely affect our business and operating results.

Our business could be subject to stricter obligations, greater fines and private causes of action under the enactment of new [added: laws and regulations relating to privacy,] data [removed: privacy laws,] [added: protection, and information security,] including but not limited to, the European Union General Data Protection [removed: Regulation enacted] [added: Regulation, which became effective] on May 25, [removed: 2018] [added: 2018,] and [added: which provides for penalties of up to 20 million Euros or four percent of our annual global revenues, and] the California Consumer Privacy [removed: Act to be enacted] [added: Act, which became effective] on January 1, 2020.

The successful assertion of one or more large claims against us that exceeds available insurance coverage, or the occurrence of changes in our insurance policies, [added: including premium increases or the imposition of large deductible or co-insurance requirements, could have a material adverse effect on our business, operating results and financial condition.]

For example, in [removed: March 2016, November 2016,] May 2018, [removed: and] April 2019 [added: and May 2019] we executed restructuring events designed to streamline our business, reduce our cost structure and focus our resources on key strategic opportunities.

In fiscal 2018, we [removed: created the Storage Systems and Software, Cloud Data Services, and Cloud Infrastructure] [added: moved to a] business [removed: units] [added: unit structure] to enable us to develop the organization and systems to successfully execute a multi-product business.

Rapid changes in the size, alignment or organization of our workforce, including our [removed: new] business unit structure and sales account coverage, could adversely affect our ability to develop, sell and deliver products and services as planned or impair our ability to realize our current or future business and financial objectives.

If our products [added: or services] are defective, or are perceived to be defective as a result of improper use or maintenance, our gross margins, operating results and customer relationships may be harmed.

Our [removed: hardware and software] products [added: and services] are complex.

We have experienced in the past, and expect to experience in the future, quality [removed: issues.][added: issues impacting certain products, and in the future, we could experience reliability issues with services we provide.]

Such quality [added: and reliability] issues may be due to, for example, our own designs or processes, the designs or processes of our suppliers, and/or flaws in third-party software used in our products.

[removed: Quality risk is] [added: These types of risks are] most acute when we are introducing new products.

Quality [added: or reliability] issues have and could again in the future cause customers to experience outages or disruptions in service, data loss or data corruption.

If we fail to remedy a product [removed: defect,] [added: defect or flaw,] we may experience a failure of a product line, temporary or permanent withdrawal from a product or market, damage to our reputation, loss of revenue, inventory costs or product reengineering expenses and higher ongoing warranty and service costs, and these occurrences could have a material impact on our gross margins, business and operating results.

We are unable to predict the extent to which the global COVID-19 pandemic may adversely impact our business operations, financial condition, results of operations or cash flows.

The novel coronavirus, or COVID-19, pandemic and efforts to control its spread have significantly curtailed the movement of people, goods and services worldwide, including in most or all of the regions in which we sell our products and services and conduct our business operations.

While we are currently considered an essential business in many of the key regions in which we operate, including in the United States (U.S.), there is no guarantee that we will continue to be classified as such.

We have taken precautionary measures intended to minimize the risk of the virus to our employees, our customers, and the communities in which we operate, including office closures and working remotely for the vast majority of employees, all of which could negatively impact our business.

The magnitude and duration of the disruption and resulting decline in business activity is uncertain and has limited our ability to forecast future demand for our products and services.

The COVID-19 pandemic has, and we expect it to continue to, adversely affect our business in a variety of ways, including by negatively impacting the demand for our products and services, and our ability to build and convert our sales pipeline (including delayed and deferred purchases); restricting our sales, marketing and distribution efforts; disrupting our supply chain and our ability to deliver product to customers; and constraining business operations, research and development capabilities, engineering, design and manufacturing processes and other important business activities.

In addition, the COVID-19 pandemic has disrupted the operations of our suppliers, customers and partners for an indefinite period of time, including as a result of travel restrictions and/or business shutdowns and limited access to capital markets, all of which have and may continue to negatively impact our business and results of operations, including cash flows.

Accordingly, we expect the COVID-19 pandemic to have a negative impact on our future sales and results of operations, the magnitude and duration of which we are unable to predict.

Additionally, concerns over the economic impact of COVID-19 pandemic have caused extreme volatility in financial and other capital markets, which volatility has and may continue to adversely impact our stock price and could impact our ability to access capital markets.

More generally, the COVID-19 pandemic has adversely affected economies and financial markets globally, potentially leading to a prolonged economic downturn, which could decrease technology spending and adversely affect demand for our offerings and harm our business and results of operations for an extended period of time.

To the extent that the COVID-19 pandemic adversely affects our business and financial results, it may also have the effect of heightening many of the other risks described in this “Risk Factors” section and those incorporated by reference herein, such as those relating to our products and services, financial performance, credit rating and debt obligations.

We are unable to predict whether the impact of the COVID-19 pandemic will accelerate the decline of our traditional market and increase demand for our cloud offerings.

The impacts of the COVID-19 pandemic, including the increase in the number of employees working remotely, could accelerate customer adoption of cloud solutions and contribute to increased competition in the market.

For example, we are unable to predict the economic impact of the ongoing COVID-19 pandemic on us or our employees, suppliers, customers and partners, and consequently we withdrew our guidance for the fourth quarter of our fiscal 2020 and have limited our fiscal 2021 guidance to cover only the first quarter of fiscal 2021.

We are also unable to predict whether increased customer spending on our cloud offerings and virtual desktop infrastructure will continue during and after the COVID-19 pandemic.

- Impacts on our supply chain from adverse public health developments, including outbreaks of contagious diseases such as the ongoing COVID-19 pandemic;

High-profile cyberattacks and security breaches have increased in recent years, with the potential for such acts heightened as a result of the number of employees working remotely due to COVID-19.

We also may face delays in our ability to identify or otherwise respond to any cybersecurity incident or any other breach.

Additionally, we use third-party service providers to provide some services to us that involve the storage or transmission of data, such as SaaS, cloud computing, and internet infrastructure and bandwidth, and they face various cybersecurity threats and also may suffer cybersecurity incidents or other security breaches.

Failure to comply with new and existing laws and regulations relating to privacy, data protection, and information security could cause harm to our reputation, result in liability and adversely impact our business.

Our business is subject to increasing regulation by various federal, state and international governmental agencies responsible for enacting and enforcing laws and regulations relating to privacy, data protection, and information security.

The rapidly evolving regulatory framework in this area is likely to remain uncertain for the foreseeable future.

In addition, changes in the interpretation and enforcement of existing laws and regulations could impact our business operations and those of our partners, vendors and customers.

Privacy advocates and industry groups also may propose new and different self-regulatory standards that may legally or contractually apply to us, and these standards may be subject to change.

These factors create uncertainty and we cannot yet determine the impacts such future laws, regulations and standards, or changes to such laws, regulations, or standards, or to their interpretation or enforcement, may have on our business or the businesses of our partners, vendors and customers.

In addition, changes in the interpretation of existing laws and regulations could impact our business operations and those of our partners, vendors and customers.

Because the interpretation and application of many laws and regulations relating to privacy, data protection and information security, along with industry standards, are uncertain, it is possible that relevant laws, regulations, or standards may be interpreted and applied in manners that are, or are alleged to be, inconsistent with our data management practices or the features of our products.

Any failure, or perceived failure, by us or our business partners to comply with federal, state or international laws and regulations relating to privacy, data protection, and information security, commitments relating to privacy, data protection, and information security contained in our contracts, self-regulatory standards that apply to us or that third parties assert are applicable to us, or our policies or notices we post or make available could subject us to claims, investigations, sanctions, enforcement actions and other proceedings, disgorgement of profits, fines, damages, civil and criminal liability, penalties or injunctions.

Additionally, as a technology provider, our customers expect that we can demonstrate compliance with laws and regulations relating to privacy, data protection, and information security, and our inability or perceived inability to do so may adversely impact sales of our products and services, particularly to customers in highly-regulated industries.

We have invested company resources in complying with new laws, regulations, and other obligations relating to privacy, data protection, and information security, and we may be required to make additional, significant changes in our business operations, all of which may adversely affect our revenue and our business overall.

As a result of any inability or inability to comply with such laws and regulations, our reputation and brand may be harmed, we could incur significant costs, and financial and operating results could be materially adversely affected, and we could be required to modify or change our products or our business practices, any of which could have an adverse effect on our business.

In fiscal 2020, we further reorganized our go-to-market organization to streamline operations and improve alignment with customer and market opportunities.

For example, in both fiscal 2020 and fiscal 2018 we acquired two privately held companies.

Significant volatility in capital markets caused by the COVID-19 pandemic has recently heightened these risks.

Further, the impact of the COVID-19 pandemic could exacerbate an economic slowdown and possibly cause a global recession.

An economic slowdown or increased regional or global economic uncertainty may lead to failures of counterparties, including financial institutions, governments and insurers which could result in a material decline in the value of our investment portfolio and substantially reduce our investment returns.

We may experience increased losses as potentially more customers are unable to pay all or a portion of their obligations to us, particularly in the current environment when access to sources of liquidity is limited as a result of the global COVID-19 pandemic.

companies.

For example, the ongoing COVID-19 pandemic is impeding the mobility of our personnel, inventories, equipment and products and disrupting our business operations.

We incur costs to comply with the requirements of such laws.

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.

For example, in October 2016, Dell Inc. and EMC Corp. consummated their agreement to merge.

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We are also subject to the potential loss of proprietary information due to

including premium increases or the imposition of large deductible or co-insurance requirements, could have a material adverse effect on our business, operating results and financial condition.

We also reorganized our sales resources to better align with customer and market opportunities.

We have also increased the cadence of our product release cycle, which could impact product and service quality.

Furthermore, if

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.

We incur costs to comply with the disclosure requirements of this law and may realize other costs relating to the sourcing and availability of minerals used in our products.

We may not be able to

We may experience losses due to a customer’s inability to pay.

Together with our partners, we empower [removed: global] organizations to unleash the full potential of their data to expand customer touchpoints, foster greater innovation and optimize their operations.

[removed: Our Data Fabric] [added: A data fabric] simplifies the integration and orchestration of data [removed: for applications and analytics in clouds,] [added: services] across clouds and on-premises to accelerate digital transformation.

NetApp’s unique approach to data services enables organizations to [removed: inspire] [added: drive data-driven] innovation with the cloud, build clouds to [removed: accelerate new services,] [added: gain speed] and [added: agility, and] modernize [added: and simplify] IT [removed: architecture with cloud-connected flash.][added: to accelerate critical business applications.]

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 [removed: have historically grouped] [added: group] our products by “Strategic” and “Mature” solutions.

Mature [removed: solutions include 7-mode ONTAP,] [added: now includes hybrid and all-disk array products: FAS and E-series, including all related] add-on hardware and [removed: related operating system (OS) software] [added: OS software,] and original equipment manufacturers (OEM) products.

[removed: Additionally,] [added: In addition to our products and solutions,] we provide a variety of services [added: to our customers,] including software maintenance, hardware maintenance and other services including professional services, global support solutions, and customer education and training to help customers most effectively [added: build their unique data fabrics and efficiently] manage their data.

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 [removed: amounts, percentages] [added: amounts] and [removed: cash conversion cycle):][added: percentages):]

| | | April [removed: 26, 2019] [added: 24, 2020] | | | | April [removed: 27, 2018] [added: 26, 2019] | | | | April [removed: 28, 2017] [added: 27, 2018] | | |

| Net revenues | | $ | [removed: 6,146] [added: 5,412] | | | $ | [removed: 5,919] [added: 6,146] | | | $ | [removed: 5,491] [added: 5,919] | |

| Gross profit | | $ | [removed: 3,945] [added: 3,623] | | | $ | [removed: 3,709] [added: 3,945] | | | $ | [removed: 3,364] [added: 3,709] | |

| Gross profit margin percentage | | | [removed: 64] [added: 67] | % | | | [removed: 63] [added: 64] | % | | | [removed: 61] [added: 63] | % |

| Income from operations | | $ | [removed: 1,221] [added: 945] | | | $ | [removed: 1,158] [added: 1,221] | | | $ | [removed: 621] [added: 1,158] | |

| Income from operations as a percentage of net revenues | | | [removed: 20] [added: 17] | % | | | 20 | % | | | [removed: 11] [added: 20] | % |

| Provision for income taxes | | $ | [removed: 99] [added: 125] | | | $ | [removed: 1,083] [added: 99] | | | $ | [removed: 140] [added: 1,083] | |

| Net income | | $ | [removed: 1,169] [added: 819] | | | $ | [removed: 116] [added: 1,169] | | | $ | [removed: 481] [added: 116] | |

| Diluted net income per share | | $ | [removed: 4.51] [added: 3.52] | | | $ | [removed: 0.42] [added: 4.51] | | | $ | [removed: 1.71] [added: 0.42] | |

| [removed: Operating] [added: Net] cash [removed: flows] [added: provided by operating activities] | | $ | [removed: 1,341] [added: 1,060] | | | $ | [removed: 1,478] [added: 1,341] | | | $ | [removed: 986] [added: 1,478] | |

| | | April [removed: 26, 2019] [added: 24, 2020] | | | | April [removed: 27, 2018] [added: 26, 2019] | | |

| Deferred revenue and financed unearned services revenue | | $ | [removed: 3,668] [added: 3,698] | | | $ | [removed: 3,363] [added: 3,668] | |

[removed: | | • |] Net [removed: revenues: Our net] revenues [removed: increased 4% in] [added: for] fiscal 2019 [removed: compared to fiscal 2018. This was primarily due to] [added: were $6,146 million,] an increase of [removed: 7% in] [added: $227 million, or 4% compared to fiscal 2018, reflecting higher] product [added: and software maintenance] revenues, partially offset by [removed: a 3% decrease in software and] [added: slightly lower] hardware maintenance and other services revenues. [removed: |]

[removed: | | • |] Gross profit [removed: margin percentage: Our gross profit margin] as a percentage of net revenues [added: for fiscal 2020] increased by [removed: one] [added: almost three points compared to fiscal 2019, primarily as a result of software and hardware maintenance revenues representing a higher] percentage [removed: point] [added: of total revenues] in fiscal [removed: 2019 compared] [added: 2020, due] to [removed: fiscal 2018, reflecting an increase] [added: the decline] in [removed: gross profit margin on] product revenues, and, to a lesser extent, [removed: an increase in] [added: slightly higher] gross profit [removed: margin] [added: margins] on [added: product revenues and] hardware maintenance and other services revenues. [removed: |]

| | • | [removed: Net] [added: *Net] income and Diluted income per [removed: share:] [added: share:*] The [removed: increase] [added: decrease] in both net income and diluted net income per share in fiscal [removed: 2019] [added: 2020] compared to fiscal [removed: 2018] [added: 2019] reflect the factors discussed above. Diluted net income per share was favorably impacted by a [removed: 6%] [added: 10%] decrease in the annual weighted average number of dilutive shares, [removed: primarily] due to share repurchases. |

| | • | [removed: Operating] [added: *Operating] cash [removed: flows:] [added: flows:*] Operating cash flows decreased by [removed: 9%] [added: 21%] in fiscal [removed: 2019] [added: 2020] compared to fiscal [removed: 2018,] [added: 2019, primarily] reflecting [removed: changes in operating assets and liabilities, partially offset by higher] [added: lower] net income. |

| | • | [removed: Deferred revenue and financed unearned services revenue: Total deferred] [added: *Deferred] revenue and financed unearned services [removed: revenue] [added: revenue*] increased [removed: $305] [added: $343] million, [removed: or 9%, as of fiscal 2019 year end compared to fiscal 2018 year end] primarily due to [removed: increases] [added: an increase] in [removed: the installed base and aggregate contract values under] [added: deferred] software and hardware maintenance [removed: contracts.] [added: contract revenue associated with a growing installed base.] |

During fiscal [removed: 2019,] [added: 2020,] we repurchased [removed: 29] [added: 25] million shares of our common stock at an average price of [removed: $72.87] [added: $56.34] per share, for an aggregate purchase price of [removed: $2.1] [added: $1.4] billion.

We also declared cash dividends of an aggregate of [removed: $1.60] [added: $1.92] per share in fiscal [removed: 2019,] [added: 2020,] for which we paid an aggregate of [removed: $403] [added: $439] million.

Adoption of [removed: Revenue] [added: Lease] Accounting Standard

[removed: During fiscal 2019, we formed a joint venture with Lenovo (Beijing) Information Technology Ltd. (“Lenovo”) in China and, in] [added: In] February 2019, [added: we] contributed [added: cash and other] assets [added: with a total book value of $7 million] to [removed: the] [added: a] newly formed [removed: entity,] [added: joint venture with] Lenovo [removed: NetApp Technology Limited (“LNTL”), which began operations the same month,] in exchange for a non-controlling 49% equity [removed: interest.][added: interest in the new entity, Lenovo NetApp Technology Limited (“LNTL”).]

The [removed: assets we contributed had an aggregate book] value of [removed: $7 million, while the fair value of] our equity interest [removed: in LNTL] was [removed: determined to be] $80 million, resulting in a gain of $73 [removed: million.][added: million in fiscal 2019.]

Our estimates are based on historical experience and various other assumptions that we believe to be reasonable under the circumstances, [added: including] the [added: ongoing COVID-19 pandemic, the] results of which form the basis for making judgments about the carrying values of assets and liabilities.

| • | 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. | | • | Although we use our best estimates to forecast future product demand, any significant unanticipated changes in [removed: demand] [added: demand, which could be exacerbated by the effects of the COVID-19 pandemic,] 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. |

For our annual goodwill impairment test in the fourth quarter of fiscal [removed: 2019,] [added: 2020,] we performed a quantitative test and determined the fair value of our reporting unit substantially exceeded its carrying amount, therefore, found no impairment of goodwill.

The following are the key estimates and assumptions and corresponding uncertainties for estimating the value of our goodwill and [added: purchased intangible assets:]

| • | 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. | | • | 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. [added: Volatile macroeconomic and market conditions caused by the COVID-19 pandemic have increased the level of uncertainty and subjectivity of certain management assumptions and estimates.] |

| • | Evaluations of possible goodwill and purchased intangible [removed: assets] [added: asset] 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 unit and assets. | | • | 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 reporting unit 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 [removed: conditions] [added: conditions, such as those related to the COVID-19 pandemic,] 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. |

[added: |] Product [removed: Warranties][added: | | | 55 | | % | | 61 | | % | | 60 | | % |]

| • | 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. | | • | 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 [removed: issuer,] [added: issuer or] decreases in the marketability of the [removed: securities.] [added: securities, with the ongoing COVID-19 pandemic contributing to these uncertainties.] If the fair value of our investments decreases significantly and, if because of changes in our ability and 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: Income Taxes][added: Income Taxes]

Fiscal year [removed: 2019,] [added: 2020,] which ended on April [removed: 26, 2019,] [added: 24, 2020,] fiscal year [removed: 2018,] [added: 2019,] which ended on April [removed: 27, 2018,] [added: 26, 2019,] and fiscal year [removed: 2017,] [added: 2018,] which ended on April [removed: 28, 2017,] [added: 27, 2018,] were [removed: each] [added: all] 52-week years.

| | | [removed: 2019] [added: 2020] | | | | [removed: 2018] [added: 2019] | | | | [removed: 2017] [added: 2018] | | | |

NetApp is a leader in hybrid cloud data services.

In a world of increasing complexity, we simplify.

We help our customers ensure their data and applications are in the right place at the right time with the right characteristics and capabilities in order to achieve new insights and accelerate innovation.

Only NetApp delivers everything IT organizations need to build their own unique data fabrics.

NetApp helps customers move from building data centers to building data fabrics.

Only NetApp can deliver the full range of capabilities organizations need for their data fabrics: the power to discover resources, integrate disparate data services, automate operations, optimize over time, and protect and secure data everywhere.

| | • | Adopt new cloud-based capabilities by leveraging the best cloud resources for their business and simplify the complexities of managing data across multiple, public clouds and on-premises |

| | • | Add new capabilities to their current environment by delivering new applications and services faster, and run existing workloads more efficiently with a foundation that brings the power of cloud-native data services on premises |

| | • | Run their current IT application environment more efficiently by optimizing and future proofing infrastructure with high-performing, cloud-integrated technologies and converged infrastructure. |

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

As our product portfolio evolves, market dynamics change, and management continues to assess our largest growth opportunities, we periodically change how we group certain products.

Beginning in fiscal 2020, Strategic includes all-flash array products: A-series arrays (AFF), SolidFire, and EF-series, including all related add-on hardware and operating system (OS) software, NetApp HCI, StorageGrid, and optional add-on software products.

Prior to this grouping change, Hybrid FAS products and E-Series were included in Strategic, while all add-on hardware and OS software were included in Mature.

For comparability, Strategic and Mature revenues presented for the prior year periods have been recast based on the revised groupings.

COVID-19

The novel coronavirus, or COVID-19, pandemic and efforts to control its spread have significantly curtailed the movement of people, goods and services worldwide, including in most or all of the regions in which we sell our products and services and conduct our business operations.

We have taken precautionary measures intended to minimize the risk of the virus to our employees, our customers, and the communities in which we operate.

Since March 2020, the vast majority of our employees have been working remotely and we have suspended business travel.

During the fourth quarter of fiscal 2020, due to increased macroeconomic uncertainty caused by COVID-19, we observed certain customers delay purchases of our products and services, while other customers accelerated or placed new orders to address the

demands of remote working and digital business, though on a net basis the impact to product revenues was unfavorable.

We also experienced certain logistical challenges in delivering our products and services to customers in certain regions, and minor supply chain constraints.

We believe our existing balances of cash, cash equivalents and investments, cash generated from operations, and ability to access capital markets and committed lines of credit will be sufficient to satisfy our working capital needs, capital expenditures, dividends, required debt repayments and other liquidity requirements associated with our operations.

In March 2020, we suspended our stock repurchase program.

The magnitude and duration of the disruption to our business, and impact to our operational and financial performance, caused by COVID-19 pandemic is uncertain.

Refer to Item 1A.

– Risk Factors for the significant risks we have identified as a result of the COVID-19 pandemic.

| | • | *Net revenues*: Our net revenues decreased 12% in fiscal 2020 compared to fiscal 2019. This was primarily due to a decrease of 20% in product revenues. |

| | • | *Gross profit margin percentage:* Our gross profit margin as a percentage of net revenues increased by almost three percentage points in fiscal 2020 compared to fiscal 2019, primarily as a result of software and hardware maintenance revenues representing a higher percentage of total revenues in fiscal 2020, due to the decline in product revenues. |

| | • | *Income from operations as a percentage of net revenues:* Our income from operations as a percentage of net revenues decreased by approximately two and a half percentage points in fiscal 2020 compared to fiscal 2019, primarily due to a decrease in net revenues in fiscal 2020, partially offset by a slight decrease in operating expenses. |

| | • | *Provision for income taxes:* Our provision for income taxes increased in fiscal 2020 compared to fiscal 2019 primarily as a result of differences in discrete tax impacts in each year. |

| | • | *Deferred revenue and financed unearned services revenue:* Our total deferred revenue and financed unearned services revenue balance was relatively consistent as of both the end of fiscal 2020 and fiscal 2019. |

Acquisitions

On May 23, 2019, we acquired all the outstanding shares of privately-held Cognigo Research Ltd., a provider of data discovery classification software designed to manage and protect critical data, for $53 million in cash.

On March 6, 2020, we acquired all the outstanding shares of privately-held Talon Storage Solutions, Inc., a provider of next generation software-defined storage solutions, for $23 million in cash.

On April 28, 2020, in the first quarter of fiscal 2021, we acquired all the outstanding shares of privately-held Cloud Jumper Corporation, a provider of virtual desktop infrastructure and remote desktop services solutions, for approximately $34 million in cash.

Restructuring Event

In the first quarter of fiscal 2020, we announced a restructuring plan to reduce costs and redirect resources to our highest return activities, which included a reduction in our global workforce by approximately 2%, and incurred charges of approximately $21 million, consisting primarily of employee severance costs.

See Note 13 – Restructuring Charges for additional information.

In the first quarter of fiscal 2020, we adopted the new accounting standard Leases (ASC 842) using the modified retrospective approach, electing the optional transition method of not adjusting our comparative period financial statements.

Adoption of the new standard resulted in the recognition of approximately $149 million of operating lease right-of-use assets, net of deferred rent and restructuring liabilities, and $158 million of lease liabilities on our consolidated balance sheets as of the beginning of fiscal 2020.

| --- | --- |

NetApp is the data authority for hybrid cloud.

We provide a full range of hybrid cloud data services that simplify management of applications and data across cloud and on-premises environments to accelerate digital transformation.

NetApp delivers a Data Fabric built for the data-driven world.

We deliver a Data Fabric with consistent data services for data visibility and insights, data access and control, and data protection and security, that unleashes the power of data to achieve a new competitive advantage.

| | • | Continually fuel business growth by delivering data-rich customer experiences through new application deployments that easily use data and services regardless of where they reside or in what form. |

| | • | Accelerate digital transformation by developing a next-generation, cloud-architected infrastructure that manages data and services as one integrated resource supporting both public and private clouds. |

| | • | Free the resources necessary to fund transformation by deploying the industry’s leading flash storage solution, which is highly efficient and scales from the edge to the core to the cloud. |

Customers are attracted by the speed and scale benefits of the public cloud but need new data management capabilities to keep control of data as it moves beyond the walls of the enterprise.

NetApp believes the hybrid cloud is fast becoming the dominant model for enterprise IT.

Our Data Fabric approach enables our customers to manage, secure and protect their data from on-premises to public to hybrid clouds, all at the scale needed to accommodate the exponential data growth of the digital world.

Budget constraints and skill imbalances lead our customers to seek help in integrating, deploying and managing the solutions they need to stay competitive.

This drives demand for converged and hyper-converged infrastructure solutions.

FlexPod is the converged infrastructure of choice for many of the largest enterprises around the globe.

Customers can break free from the limits of first-generation HCI with NetApp HCI and attain guaranteed performance with high levels of flexibility, scale, automation, and integration with the Data Fabric.

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—all while lowering total cost of ownership.

All-flash array technology is the de facto choice as customers seek performance and economic benefits from replacing hard disk installations.

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

Strategic solutions include Clustered ONTAP, branded E-Series, SolidFire, converged and hyper-converged infrastructure, enterprise software license agreements (ELAs) and other optional add-on software products.

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

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

| Cash conversion cycle (days) | | | 3 | | | | (14 | ) |

| | • | Income from operations as a percentage of net revenues: Our income from operations as a percentage of net revenues remained relatively flat in fiscal 2019 compared to fiscal 2018. |

| | • | Provision for income taxes: Our provision for income taxes decreased significantly in fiscal 2019 compared to fiscal 2018 as significant charges were recorded in fiscal 2018 in connection with U.S. tax reform. |

| | • | Cash Conversion Cycle: Our cash conversion cycle was 3 days in the fourth quarter of fiscal 2019, compared to (14) days in the corresponding period of fiscal 2018, reflecting lower Days Payables Outstanding, higher Days Inventory Outstanding, and higher Days Sales Outstanding. |

As of the beginning of fiscal 2019, we adopted the new accounting standard Revenue from Contracts with Customers (ASC 606) using the full retrospective method of adoption.

Accordingly, our prior years consolidated financial statements and supplementary data, as presented herein, have been restated to conform to the new rules.

As illustrated in Note 7 – Revenue of the Notes to Consolidated Financial Statements, the overall impact of adoption was not significant to prior years.

However, application of the new rules to our ELAs resulted in over $100 million of product revenues for such arrangements in fiscal 2019, that are incremental to the amounts we would have recognized under the old standard.

Under ASC 606, we recognize the software license fee component of our ELAs up-front, whereas under the prior rules the software license fee was recognized over the term of the ELA.

Restructuring Events

During fiscal 2019, we announced two separate restructuring and reduction in workforce plans designed to reduce costs and redirect resources to our highest return activities.

In connection with these plans, we reduced our worldwide headcount by less than 3%, and incurred aggregate charges of approximately $35 million, consisting primarily of employee severance costs.

Joint Venture

LNTL will be integral to our sales channels strategy in China, acting as a distributor of our offerings to customers headquartered there, and involved in certain OEM sales to Lenovo.

It will also endeavor to localize our products and services, and to develop new joint offerings for the China market by leveraging NetApp and Lenovo technologies.

| | Key Estimates and Assumptions | | | Key Uncertainties |

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

| | | | | |

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

Fixed Income Investments — As of April [removed: 26, 2019,] [added: 24, 2020,] we had fixed income debt investments of [removed: $1.7 billion.][added: $224 million.]

A hypothetical 100 basis point increase in market interest rates from levels as of April [removed: 26, 2019] [added: 24, 2020] would have resulted in a decrease in the fair value of our fixed-income securities of approximately [removed: $40] [added: $2] million.

Debt — As of April [removed: 26, 2019,] [added: 24, 2020,] we have outstanding [removed: $1.6] [added: $1.2] billion aggregate principal amount of Senior Notes.

We carry these instruments at face value less unamortized discount [added: and issuance costs] on our consolidated balance sheets.

See Note [removed: 10] [added: 9] – Financing Arrangements of the Notes to Consolidated Financial Statements for more information.

[added: Commercial Paper Program and] Credit Facility — We are exposed to the impact of changes in interest rates in connection with our $1.0 billion [added: commercial paper program and our $1.0 billion] five-year revolving credit facility.

Borrowings under [removed: the facility] [added: these arrangements] accrue interest at rates that vary based on certain market rates and our credit rating on our Senior Notes.

Consequently, our interest expense [removed: would fluctuate] [added: fluctuates] with any changes in these market interest rates or in our credit rating [removed: if] [added: when] we [removed: were to] borrow any amounts under [removed: the credit facility.][added: these arrangements.]

As of April [removed: 26, 2019,] [added: 24, 2020, there were] no amounts [removed: were] outstanding under the credit facility.

[removed: Foreign] [added: Foreign] Currency Exchange Rate [removed: Risk][added: Risk]

All contracts have a maturity of less than [removed: six] [added: 12] months.

As of April 24, 2020, we had commercial paper notes outstanding with an aggregate principal amount of $523 million, weighted-average interest rates of 2.01% and maturities primarily less than three months.

See Note 9 – Financing Arrangements of the Notes to Consolidated Financial Statements for more information.

Together with our partners, we empower [removed: global] organizations to unleash the full potential of their data to expand customer touchpoints, foster greater innovation and optimize their operations.

To [removed: be successful in their digital transformations,] [added: successfully transform,] data must become the lifeblood of an organization, [removed: seamlessly flowing through it] [added: accelerating efforts] to optimize operations, create innovative business opportunities and enable new customer [removed: touchpoints through technology.][added: touchpoints.]

[removed: Leaders are] [added: This puts IT leaders] under [removed: enormous] [added: tremendous] pressure to harness today’s [removed: volume] [added: wealth] of data and [removed: apply it] [added: leverage technology] to create new value across the entire [removed: organization,] [added: organization -] all with limited time, [removed: skills,] [added: resources] and budget.

[removed: The] NetApp [removed: Data] Fabric [added: Orchestrator]

[removed: Customers can build their unique Data Fabric from a catalog of] [added: It delivers] consistent [added: and integrated hybrid cloud] data services [removed: that provide] [added: for] data visibility and insights, data access and [removed: control,] [added: control] and data protection and security.

NetApp’s unique approach to data services enables organizations to [removed: inspire innovation with the cloud,] [added: modernize and simplify IT,] build [added: private] clouds [removed: to accelerate new services,] [added: for speed] and [removed: modernize IT architecture with cloud-connected flash.][added: agility, and fuel data-driven innovation on any cloud.]

[added: Products include: Cloud Volumes ONTAP, Azure] NetApp [added: Files,] Cloud Volumes Service for [removed: AWS][added: Google Cloud, and Cloud Volumes Service for AWS.]

NetApp Cloud [removed: Volumes ONTAP][added: Manager]

NetApp Cloud Insights is an infrastructure monitoring tool that gives organizations visibility into their entire [removed: infrastructure.][added: infrastructure with the ability to monitor, troubleshoot, and optimize cost across all resources including public clouds and private data centers.]

FlexPod® is a portfolio of [removed: prevalidated] [added: pre-validated] designs and integration that combine the Cisco Unified Computing System integrated infrastructure and NetApp storage components to reduce risk and accelerate the deployment of data center infrastructure.

[removed: Today, customers] [added: Customers] and partners can choose from more than 100 validated application and infrastructure [removed: designs.][added: designs to confidently power AI, multicloud, and modern enterprise applications.]

StorageGRID supports industry-standard object APIs [removed: such as] [added: like the] Amazon Simple Storage Service (S3) [removed: API and OpenStack Swift] API.

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

[added: Powered by ONTAP,] AFF [added: A-series] systems [removed: eliminate] [added: accelerate, manage, and protect business-critical data while eliminating] performance silos [removed: in the data center] by seamlessly integrating into a cluster with hybrid FAS systems, enabling workloads to transparently move between high-performance tiers and low-cost capacity tiers.

NetApp [removed: SolidFire®] [added: SolidFire] all-flash storage [removed: systems] [added: systems, powered by Element software,] are architected for rapidly transforming environments.

As the foundation for private cloud infrastructure, SolidFire allows independent scaling, consistent performance, and automation [removed: integrations, giving private cloud infrastructure the flexibility and consistency to scale as a service provider.][added: integrations.]

NetApp EF-Series all-flash [removed: arrays] [added: arrays, powered by SANtricity software,] deliver fast, consistent response times to accelerate high-performance databases and data analytics.

NetApp [removed: E-Series hybrid flash arrays] [added: E-series Hybrid Flash systems, powered by SANtricity software,] are built for dedicated, high-bandwidth applications [removed: such as] [added: like] data analytics, video surveillance, and disk-based backup that need simple, fast, reliable SAN storage.

With ONTAP 9, customers can build a hybrid cloud that is the foundation of a Data [removed: Fabric.][added: Fabric, spanning disk, flash, and cloud.]

ONTAP 9 provides flexibility to design and deploy a storage environment across the widest range of [removed: architectures—engineered] [added: architectures - engineered] systems, software-defined storage (SDS), and the [removed: cloud—spanning flash] [added: cloud - while unifying data management across all of them, as well as SAN] and [removed: disk infrastructures.]

Memory Accelerated Data (MAX Data) moves beyond caching to true memory tiering for next-generation Intel Optane DC persistent memory (Optane DC [removed: PMM)—providing] [added: PMM) - providing] application performance and enterprise data protection.

NetApp OnCommand [removed: API Services][added: Insight]

NetApp Data Availability Services [added: (NDAS)] simplify the protection and management of NetApp ONTAP data from primary to secondary to cloud S3 storage.

[removed: NetApp SnapCenter®] [added: This] software [removed: is] [added: simplifies backup, restore, and clone lifecycle management with] a unified, scalable platform for application-consistent data protection and [removed: clone management.][added: application-integrated workflows.]

NetApp SnapMirror® software is a cost-effective, easy-to-use unified replication [removed: solution across the Data Fabric,] [added: solution,] replicating data at high speeds [removed: over LAN or WAN.][added: across the Data Fabric.]

[removed: NetApp] [added: NetApp] SnapLock Data Compliance [removed: Software][added: Software]

NetApp SnapLock® software delivers high-performance disk-based data permanence for HDD and [removed: solid-state disk (SSD)] [added: SSD] deployments.

Our proven methodologies, validated designs, and best practices are geared to ensure desired [added: business and technical] outcomes.

NetApp focuses primarily on the cloud data services, [removed: private] [added: hybrid] cloud, and storage markets.

During fiscal [removed: 2019,] [added: 2020,] sales through our indirect channels represented [removed: 76%] [added: 79%] of our net revenues.

As of April [removed: 26, 2019,] [added: 24, 2020,] our worldwide sales and marketing functions consisted of approximately [removed: 5,000] [added: 5,100] managers, sales representatives and technical support personnel.

Sales to customers Arrow Electronics, Inc. and Tech Data Corporation, which are distributors, accounted for [removed: 24%] [added: 25%] and [removed: 20%] [added: 21%] of our net revenues, respectively, in fiscal [removed: 2019.][added: 2020.]

Information about sales to and accounts receivables from our major customers, segment disclosures, foreign operations and net sales attributable to our geographic regions is included in Note 16 – Segment, Geographic, and Significant Customer Information of the Notes to Consolidated Financial [removed: Statements][added: Statements.]

[removed: Backlog][added: Backlog]

We [removed: use] [added: strive to have] multiple [removed: vendors] [added: suppliers qualified to provide critical components where possible] and have our products manufactured in a number of locations [removed: wherever possible] to mitigate our supply chain risk.

Total research and development expenses were [removed: $827] [added: $847] million, [removed: $783] [added: $827] million and [removed: $779] [added: $783] million in fiscal [removed: 2019, 2018] [added: 2020, 2019] and [removed: 2017,] [added: 2018,] respectively.

While the short- and long-term impact of these evolving trends cannot be predicted, NetApp is confident that our customers recognize the value in our cloud and Data Fabric [removed: strategy.][added: strategies.]

NetApp generally relies on patent, copyright, trademark, trade secret and contract laws to establish and maintain our proprietary rights in our [removed: technology] [added: technology, products] and [removed: products.][added: services.]

While our intellectual property rights are important to our success, we believe that our business [added: is not materially dependent on any particular patent, trademark, copyright, license or other intellectual property right.]

In addition, we have [removed: numerous] trademarks and trademark registrations in the U.S. and other countries covering our various product [added: or service] names.

NetApp, Inc. (NetApp, we, or us) is a leader in hybrid cloud data services.

In a world of increasing complexity, we simplify.

We help our customers ensure their data and applications are in the right place at the right time with the right characteristics and capabilities to enable new insights and accelerate innovation.

We do this by helping customers build their data fabrics.

Digital transformation requires IT transformation.

This is no small undertaking.

Organizations are innovating on their choice of clouds, building private clouds to gain speed and agility, and modernizing and simplifying IT to accelerate critical business applications - sometimes all at the same time.

NetApp helps customers move from building data centers to building data fabrics.

A data fabric simplifies the integration and orchestration of data services across clouds and on-premises to accelerate digital transformation.

Data fabric is an architecture and set of data services that provide consistent capabilities across a choice of endpoints spanning on-premises and multiple cloud environments.

Only NetApp can deliver the full range of capabilities organizations need for their data fabrics: the power to discover resources, integrate disparate data services, automate operations, optimize, and protect and secure data everywhere.

For customers looking to transform with cloud, only NetApp offers data services across the world’s biggest clouds: Microsoft Azure, Amazon Web Services (AWS) and Google Cloud Platform.

Customers can choose the cloud resources that are best for their workloads and reduce the complexities of managing data across multiple clouds and on premises.

For customers looking to grow by adding new capabilities, speed and agility to their current environment, NetApp provides leading private cloud capabilities.

This enables customers to deliver new applications and services faster and run existing workloads more efficiently.

Customers enjoy performance, at scale, on premises, all with a single experience that unifies on-premises and public cloud.

For customers looking to run their current application environment more efficiently, NetApp provides high-performing, cloud-integrated technologies and converged and hyper-converged infrastructures.

Customers get better results with simplicity, speed and automation across core, edge, and cloud.

NetApp helps organizations unleash the power of their data to meet business demands and gain a competitive edge.

NetApp Keystone

During fiscal year 2020, NetApp introduced Keystone - our group of programs, offerings and services that simplify the business of hybrid cloud data services.

It provides flexible cloud consumption models that make it easy to buy, easy to consume and easy to operate NetApp capabilities, whether it's on premises or in the public cloud.

With Keystone companies can lessen the complexities associated with IT infrastructure and lifecycle management.

Keystone gives IT buyers a clear, easy-to-understand path forward for managing IT, providing employees time to focus on more important business.

For IT organizations that want to take advantage of NetApp capabilities available on all the public clouds with cloud native, fully integrated and managed data and storage services paid for as a true utility, Keystone starts with NetApp cloud data services.

For IT organizations that want cloud-like experiences in their own data center, NetApp Keystone subscription services offer a public cloud-like experience based on performance tier and storage service type – block, file, or object, available as customer-managed or NetApp-managed.

For IT organizations that want to continue to buy capital infrastructure and capital equipment, Keystone offers a radically simplified experience.

Our unique combination of efficiency, performance and availability guarantees helps IT organizations protect their storage investment.

NetApp Active IQ AI-driven insights optimize the health of systems while predicting capacity and performance bottlenecks from an easy-to-use dashboard.

NetApp Cloud Data Services is a portfolio of enterprise-class solutions that enable customers to fully control and manage storage systems in the cloud, consume high-performance storage services for primary workloads, and optimize cloud environments for cost and efficiency – available on all the biggest clouds.

NetApp delivers cloud storage as a software or service, enabling customers to choose whether to fully control and manage their own storage system in the cloud or simply choose their performance levels, service level agreements (SLAs) and service level objectives (SLOs).

Customers benefit from the ability to migrate data to the cloud with ease, securely, and efficiently with built-in data transport features and services for existing NetApp or third-party storage and can choose where to deploy primary workloads, without having to re-architect the applications or databases.

NetApp cloud storage offers data management capabilities previously unavailable in public clouds, with services that deliver protection, orchestration, and optimization, as well as security and compliance.

Cloud Sync delivers simple, rapid, and continuous data migration and synchronization service for file systems with any cloud or on-premises target.

NetApp’s Cloud Tiering service allows customers to retain on-premises, high-performance All Flash FAS (AFF) and FAS Solid-State Disk (SSD) storage and combine it with the benefits of cloud economics, leveraging the low costs of Azure Blob and Amazon S3 object storage.

NetApp Global File Cache

NetApp Global File Cache is a software-based solution that delivers fast and secure access to data for users by caching ‘active data’ sets to distributed offices globally.

Cloud Manager provides IT experts and cloud architects with a centralized control plane to manage, monitor and automate data in hybrid-cloud environments, providing an integrated experience of NetApp’s Cloud Data Services.

NetApp Fabric Orchestrator discovers data, applications, and services by securely connecting to public, private, and on-premises providers.

All assets discovered sit behind a unified Data Fabric API and a single user interface.

NetApp, Inc. (NetApp, we, or us) is the data authority for hybrid cloud.

We provide a full range of hybrid cloud data services that simplify management of applications and data across cloud and on-premises environments to accelerate digital transformation.

Building a data-driven organization is challenging.

Data is becoming increasingly:

| | • | Distributed. Generated and consumed from multiple clouds and on-premises, from organic and partner sources |

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

| | • | Dynamic. Constantly changing and increasingly cloud-streamed from multiple clouds |

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

| | • | Diverse. Including analytics, artificial intelligence (AI), and machine learning capabilities from multiple clouds and on-premises |

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

Thriving in this environment requires a holistic approach to data insight, access and control that is secure, efficient, and 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 and expanding our consumption model offerings to match customer needs across cloud and on-premises offerings. |

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

NetApp delivers a Data Fabric built for the data-driven world.

The Data Fabric is NetApp’s strategy for simplifying and integrating the orchestration of data services across a choice of hybrid, multicloud environments.

Customers can easily incorporate new capabilities—AI, machine learning, blockchain, Internet of Things —from any cloud provider to speed innovation and achieve higher levels of operational efficiency to shift resources from maintenance to digital transformation.

Secure by design, the Data Fabric helps customers realize new business opportunities while minimizing risk.

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

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

NetApp believes that hybrid multicloud will be the dominant model for enterprise IT.

Customers are attracted by the speed and scale benefits of the public cloud but they need new data management capabilities to keep control of data as it moves beyond the walls of the enterprise.

The NetApp Data Fabric enables our customers to manage, secure, and protect their data from on-premises to public to hybrid clouds, all at the scale needed to accommodate the exponential data growth of the digital world.

The NetApp Cloud Data Services portfolio is focused on helping customers fuel business growth by delivering data-rich customer experiences through new application deployments that easily use data and services regardless of where they reside or in what form.

Cloud Volumes Service for AWS delivers fully managed file services for NFS, SMB, or dual protocol support.

With consistently high performance, Cloud Volumes Service provides shared persistent storage with high throughput and low latency that meets the demands of large databases and HPC applications.

Cloud Volumes ONTAP delivers secure, proven storage management services for AWS and Azure cloud storage.

Cloud Volumes ONTAP combines data control with enterprise-class storage features for various use cases, including file shares and block-level storage serving NAS and SAN protocols, disaster recovery, backup and archive, DevOps, databases, or any other enterprise workload.

Cloud Sync is NetApp’s service for rapid and secure data synchronization.

Whether organizations need to transfer files between on-premises NFS or CIFS file shares, Amazon S3 object format, Azure Blob, IBM Cloud Object Storage, or the NetApp StorageGRID® appliance, Cloud Sync moves the files where they are needed quickly and securely.

NetApp Cloud Secure

Cloud Secure operates on both cloud and on-premises storage systems to give organizations real-time alerts of malicious user behavior.

Cloud Secure uses advanced machine learning algorithms to automatically uncover unusual data activity.

It automatically updates protection policies and permissions to restrict access, stopping actual threats before they become breaches.

Based on NetApp FabricPool technology, Cloud Tiering identifies infrequently used data in on-premises storage and automatically and seamlessly moves that data to lower-cost object storage in the cloud, leaving frequently used data on the high-performant, data center storage system.

When the infrequently used tiered data is needed again, the service will automatically and seamlessly move it back to the high-performance tier.

NetApp Kubernetes Service

NetApp Kubernetes Service simplifies multicloud management by enabling organizations to create and manage production-ready Kubernetes clusters at scale with our universal Kubernetes control plane.

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

| | For the fiscal year ended April [removed: 26, 2019] [added: 24, 2020] |

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

[removed: ][added: ]

The aggregate market value of voting stock held by non-affiliates of the registrant, as of October [removed: 26, 2018,] [added: 25, 2019,] the last business day of the registrant’s most recently completed second fiscal quarter, was [removed: $12,456,432,144] [added: $7,099,736,024] (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: 7, 2019, 240,022,187] [added: 5, 2020, 221,816,300] shares of the registrant’s common stock, $0.001 par value, were outstanding.

[removed: DOCUMENTS] [added: DOCUMENTS] INCORPORATED BY [removed: REFERENCE][added: REFERENCE]

The information called for by Part III of this Form 10-K is hereby incorporated by reference from the definitive Proxy Statement for our annual meeting of stockholders, which will be filed with the Securities and Exchange Commission not later than 120 days after April [removed: 26, 2019.][added: 24, 2020.]

[removed: TABLE] [added: TABLE] OF [removed: CONTENTS][added: CONTENTS]

| Item 1 | | [Business](#Item_1_Business) | | [removed: 5] [added: 6] |

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

| Item 1B | | [Unresolved Staff Comments](#Item_1B_Unresolved_Staff_Comments) | | [removed: 25] [added: 28] |

| Item 2 | | [Properties](#ITEM_2_PROPERTIES) | | [removed: 25] [added: 28] |

| Item 3 | | [Legal Proceedings](#Item_3_Legal_Proceedings) | | [removed: 25] [added: 28] |

| Item 4 | | [Mine Safety Disclosures](#Item_4_Mine_Safety_Disclosures) | | [removed: 25] [added: 28] |

| 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: 29] |

| Item 6 | | [Selected Financial Data](#Item_6_Selected_Financial_Data) | | [removed: 29] [added: 32] |

| Item 7 | | [Management’s Discussion and Analysis of Financial Condition and Results of Operations](#Item_7_MDA) | | [removed: 30] [added: 33] |

| Item 7A | | [Quantitative and Qualitative Disclosures About Market Risk](#Item_7A_Quantitative_and_Qualitative) | | [removed: 49] [added: 52] |

| Item 8 | | [Financial Statements and Supplementary Data](#Item_8_Financial_Statements) | | [removed: 51] [added: 54] |

| Item 9 | | [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](#Item_9_Changes_in_and_Disagreements) | | [removed: 91] [added: 94] |

| Item 9A | | [Controls and Procedures](#Item_9A_Controls_and_Procedures) | | [removed: 91] [added: 94] |

| Item 9B | | [Other Information](#Item_9B_Other_Information) | | [removed: 91] [added: 94] |

| Item 10 | | [Directors, Executive Officers and Corporate Governance](#Item_10_Directors_Executive_Officers) | | [removed: 92] [added: 95] |

| Item 11 | | [Executive Compensation](#Item_11_Executive_Compensation) | | [removed: 92] [added: 95] |

| Item 12 | | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](#Item_12_Security_Ownership) | | [removed: 92] [added: 95] |

| Item 13 | | [Certain Relationships and Related Transactions, and Director Independence](#Item_13_Certain_Relationships) | | [removed: 92] [added: 95] |

| Item 14 | | [Principal Accounting Fees and Services](#Item_14_Principal_Accountant_Fees) | | [removed: 92] [added: 95] |

| Item 15 | | [Exhibits, Financial Statement Schedules](#Item_15_Exhibits_Financial_Statement) | | [removed: 92] [added: 95] |

| [Signatures](#Signatures) | | | | [removed: 99] [added: 102] |

| | • | the overall growth, structure and changes in the networked storage [removed: hardware] market; |

| | • | general global political, [removed: macroeconomic] [added: macroeconomic, social, health] and market conditions; |

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.

| | • | the impacts of the global COVID-19 pandemic on our business operations, financial condition, results of operations or cash flows; |

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

10-K 1 ntap-10k_20190426.htm 10-K

We expect that our existing facilities and those being developed worldwide are suitable and adequate for our requirements over at least the next two years and that additional space will be available [removed: as] [added: if] needed.

We owned or leased, domestically and internationally, the following properties as of April 24, 2020.

| | | Fiscal [removed: 2019] [added: 2020] | | | | | | | | Fiscal [removed: 2018] [added: 2019] | | | | | | |

| First Quarter | | $ | [removed: 83.14] [added: 73.69] | | | $ | [removed: 63.81] [added: 58.04] | | | $ | [removed: 45.24] [added: 83.14] | | | $ | [removed: 37.43] [added: 63.81] | |

| Second Quarter | | $ | [removed: 88.08] [added: 59.84] | | | $ | [removed: 70.26] [added: 44.55] | | | $ | [removed: 45.14] [added: 88.08] | | | $ | [removed: 37.55] [added: 70.26] | |

| Third Quarter | | $ | [removed: 83.95] [added: 65.38] | | | $ | [removed: 54.50] [added: 55.00] | | | $ | [removed: 64.06] [added: 83.95] | | | $ | [removed: 43.24] [added: 54.50] | |

| Fourth Quarter | | $ | [removed: 78.35] [added: 60.96] | | | $ | [removed: 61.00] [added: 34.66] | | | $ | [removed: 69.75] [added: 78.35] | | | $ | [removed: 52.00] [added: 61.00] | |

As of June [removed: 7, 2019] [added: 5, 2020] there were [removed: 413] [added: 436] holders of record of our common stock.

The Company paid cash dividends of [removed: $0.40] [added: $0.48] per outstanding common share in each quarter of fiscal [removed: 2019] [added: 2020] for an aggregate of [removed: $403] [added: $439] million, [removed: $0.20] [added: $0.40] per outstanding common share in each quarter of fiscal [removed: 2018] [added: 2019] for an aggregate of [removed: $214] [added: $403] million, and [removed: $0.19] [added: $0.20] per outstanding common share in each quarter of fiscal [removed: 2017] [added: 2018] for an aggregate of [removed: $208] [added: $214] million.

In the first quarter of fiscal [removed: 2020,] [added: 2021,] the Company declared a cash dividend of $0.48 per share of common stock, payable on July [removed: 24, 2019] [added: 29, 2020] to shareholders of record as of the close of business on July [removed: 5, 2019.][added: 10, 2020.]

[removed: Performance Graph][added: Performance Graph]

The following graph shows a comparison of cumulative total shareholder return, calculated on a dividend reinvested basis, of an investment of $100 for the Company, the S&P 500 Index, the S&P [added: 500] Information Technology Index and the S&P 1500 Technology Hardware & Equipment Index for the five years ended April [removed: 26, 2019.][added: 24, 2020.]

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

[removed: ][added: ]

*$100 invested on April [removed: 25, 2014] [added: 24, 2015] in stock or index, including reinvestment of dividends.

| | | April [removed: 2014 | | | | April] 2015 | | | | April 2016 | | | | April 2017 | | | | April 2018 | | | | April 2019 | | | [added: | April 2020 | | |]

[removed: Purchases] [added: Purchases] of Equity Securities by the Issuer and Affiliated [removed: Purchasers][added: Purchasers]

The following table provides information with respect to the shares of common stock repurchased by us during the three months ended April [removed: 26, 2019:][added: 24, 2020:]

As of April [removed: 26, 2019,] [added: 24, 2020,] our Board of Directors has authorized the repurchase of up to $13.6 billion of our common stock, including a $4.0 billion increase approved by our Board of Directors in April 2018.

Since inception of the program through April [removed: 26, 2019,] [added: 24, 2020,] we repurchased a total of [removed: 313] [added: 338] million shares of our common stock for an aggregate purchase price of [removed: $11.7] [added: $13.1] billion.

The stock repurchase program may be suspended or discontinued at any [removed: time.][added: time, and it was suspended in March 2020 due to the economic impact of the COVID-19 pandemic.]

| NetApp, Inc. | | $ | 100.00 | | | $ | 67.14 | | | $ | 115.80 | | | $ | 199.05 | | | $ | 217.15 | | | $ | 134.90 | |

| S&P 500 Index | | $ | 100.00 | | | $ | 99.69 | | | $ | 117.55 | | | $ | 134.24 | | | $ | 150.80 | | | $ | 148.44 | |

| S&P 500 Information Technology Index | | $ | 100.00 | | | $ | 98.39 | | | $ | 133.18 | | | $ | 166.85 | | | $ | 203.36 | | | $ | 233.12 | |

| S&P 1500 Technology Hardware & Equipment Index | | $ | 100.00 | | | $ | 80.59 | | | $ | 119.36 | | | $ | 138.97 | | | $ | 170.23 | | | $ | 194.68 | |

| January 25, 2020 - February 21, 2020 | | | 1,780 | | | $ | 56.18 | | | | 336,816 | | | $ | 539 | |

| February 22, 2020 - March 20, 2020 | | | 1,481 | | | $ | 41.48 | | | | 338,297 | | | $ | 477 | |

| March 21, 2020 - April 24, 2020 | | | — | | | $ | — | | | | 338,297 | | | $ | 477 | |

| Total | | | 3,261 | | | $ | 49.50 | | | | | | | | | |

| NetApp, Inc. | | $ | 100.00 | | | $ | 105.06 | | | $ | 70.54 | | | $ | 121.66 | | | $ | 209.11 | | | $ | 228.12 | |

| S&P 500 Index | | $ | 100.00 | | | $ | 115.98 | | | $ | 115.62 | | | $ | 136.33 | | | $ | 155.69 | | | $ | 174.89 | |

| S&P 500 Information Technology Index | | $ | 100.00 | | | $ | 124.83 | | | $ | 122.82 | | | $ | 166.24 | | | $ | 208.27 | | | $ | 253.85 | |

| S&P 1500 Technology Hardware & Equipment Index | | $ | 100.00 | | | $ | 130.63 | | | $ | 105.27 | | | $ | 155.92 | | | $ | 181.54 | | | $ | 222.38 | |

| January 26, 2019 - February 22, 2019 | | | 262 | | | $ | 64.77 | | | | 306,255 | | | $ | 2,372 | |

| February 23, 2019 - March 22, 2019 | | | 3,380 | | | $ | 65.53 | | | | 309,635 | | | $ | 2,150 | |

| March 23, 2019 - April 26, 2019 | | | 3,608 | | | $ | 72.49 | | | | 313,244 | | | $ | 1,889 | |

| Total | | | 7,250 | | | $ | 68.97 | | | | | | | | | |

| | | April [added: 24, 2020 | | | | April] 26, 2019 | | | | April 27, 2018 (2) | | | | April 28, 2017 (2) | | | | April 29, 2016 | | | [removed: | April 24, 2015 | | |]

| Net revenues | | $ | [removed: 6,146] [added: 5,412] | | | $ | [removed: 5,919] [added: 6,146] | | | $ | [removed: 5,491] [added: 5,919] | | | $ | [removed: 5,546] [added: 5,491] | | | $ | [removed: 6,123] [added: 5,546] | |

| Gross profit | | $ | [removed: 3,945] [added: 3,623] | | | $ | [removed: 3,709] [added: 3,945] | | | $ | [removed: 3,364] [added: 3,709] | | | $ | [removed: 3,373] [added: 3,364] | | | $ | [removed: 3,833] [added: 3,373] | |

| Provision for income taxes (1) | | $ | [removed: 99] [added: 125] | | | $ | [removed: 1,083] [added: 99] | | | $ | [removed: 140] [added: 1,083] | | | $ | [removed: 116] [added: 140] | | | $ | [removed: 153] [added: 116] | |

| Net income | | $ | [removed: 1,169] [added: 819] | | | $ | [removed: 116] [added: 1,169] | | | $ | [removed: 481] [added: 116] | | | $ | [removed: 229] [added: 481] | | | $ | [removed: 560] [added: 229] | |

| Net income per share, basic | | $ | [removed: 4.60] [added: 3.56] | | | $ | [removed: 0.43] [added: 4.60] | | | $ | [removed: 1.75] [added: 0.43] | | | $ | [removed: 0.78] [added: 1.75] | | | $ | [removed: 1.77] [added: 0.78] | |

| Net income per share, diluted | | $ | [removed: 4.51] [added: 3.52] | | | $ | [removed: 0.42] [added: 4.51] | | | $ | [removed: 1.71] [added: 0.42] | | | $ | [removed: 0.77] [added: 1.71] | | | $ | [removed: 1.75] [added: 0.77] | |

| Shares used in basic computation | | | [removed: 254] [added: 230] | | | | [removed: 268] [added: 254] | | | | [removed: 275] [added: 268] | | | | [removed: 294] [added: 275] | | | | [removed: 316] [added: 294] | |

| Shares used in diluted computation | | | [removed: 259] [added: 233] | | | | [removed: 276] [added: 259] | | | | [removed: 281] [added: 276] | | | | [removed: 297] [added: 281] | | | | [removed: 321] [added: 297] | |

| Cash dividends declared per share | | $ | [removed: 1.60] [added: 1.92] | | | $ | [removed: 0.80] [added: 1.60] | | | $ | [removed: 0.76] [added: 0.80] | | | $ | [removed: 0.72] [added: 0.76] | | | $ | [removed: 0.66] [added: 0.72] | |

| | | April [added: 24, 2020 | | | | April] 26, 2019 | | | | April 27, 2018 (2) | | | | April 28, 2017 (2) | | | | April 29, 2016 | | | [removed: | April 24, 2015 | | |]

| Cash, cash equivalents and short-term investments | | $ | [removed: 3,899] [added: 2,882] | | | $ | [removed: 5,391] [added: 3,899] | | | $ | [removed: 4,921] [added: 5,391] | | | $ | [removed: 5,303] [added: 4,921] | | | $ | [removed: 5,326] [added: 5,303] | |

| Working capital | | $ | [removed: 1,743] [added: 658] | | | $ | [removed: 3,421] [added: 1,743] | | | $ | [removed: 2,178] [added: 3,421] | | | $ | [removed: 2,786] [added: 2,178] | | | $ | [removed: 4,064] [added: 2,786] | |

| Total assets | | $ | [removed: 8,741] [added: 7,522] | | | $ | [removed: 9,991] [added: 8,741] | | | $ | [removed: 9,562] [added: 9,991] | | | $ | [removed: 10,037] [added: 9,562] | | | $ | [removed: 9,401] [added: 10,037] | |

| Total debt | | $ | [removed: 1,793] [added: 1,668] | | | $ | [removed: 1,926] [added: 1,793] | | | $ | [removed: 1,993] [added: 1,926] | | | $ | [removed: 2,339] [added: 1,993] | | | $ | [removed: 1,487] [added: 2,339] | |

| Total deferred revenue and financed unearned services revenue | | $ | [removed: 3,668] [added: 3,698] | | | $ | [removed: 3,363] [added: 3,668] | | | $ | [removed: 3,213] [added: 3,363] | | | $ | [removed: 3,385] [added: 3,213] | | | $ | [removed: 3,197] [added: 3,385] | |

| Total stockholders' equity | | $ | [removed: 1,090] [added: 242] | | | $ | [removed: 2,276] [added: 1,090] | | | $ | [removed: 2,949] [added: 2,276] | | | $ | [removed: 2,881] [added: 2,949] | | | $ | [removed: 3,414] [added: 2,881] | |

(2) Fiscal 2018 and 2017 have been adjusted for our retrospective adoption of the [removed: new] accounting standard [removed: Revenue] [added: *Revenue] from Contracts with Customers (ASC [removed: 606).][added: 606)*.]

Refer to Note 7 – Revenue of the Notes to Consolidated Financial Statements for details.

| [Consolidated Balance Sheets as of April [removed: 26, 2019] [added: 24, 2020] and April [removed: 27, 2018](#CONSOLIDATED_BALANCE_SHEETS)] [added: 26, 2019](#CONSOLIDATED_BALANCE_SHEETS)] | [removed: 52] [added: 55] |

| [Consolidated Statements of Operations for the years ended April [removed: 26, 2019,] [added: 24, 2020,] April [removed: 27, 2018] [added: 26, 2019] and April [removed: 28, 2017](#CONSOLIDATED_STATEMENTS_OPERATIONS)] [added: 27, 2018](#CONSOLIDATED_STATEMENTS_OPERATIONS)] | [removed: 53] [added: 56] |

| [Consolidated Statements of Comprehensive Income for the years ended April [removed: 26, 2019,] [added: 24, 2020,] April [removed: 27, 2018] [added: 26, 2019] and April [removed: 28, 2017](#CONSOLIDATED_STATEMENTS_COMPREHENSIVE_IN)] [added: 27, 2018](#CONSOLIDATED_STATEMENTS_COMPREHENSIVE_IN)] | [removed: 54] [added: 57] |

| [Consolidated Statements of Cash Flows for the years ended April [removed: 26, 2019,] [added: 24, 2020,] April [removed: 27, 2018] [added: 26, 2019] and April [removed: 28, 2017](#CONSOLIDATED_STATEMENTS_CASH_FLOWS)] [added: 27, 2018](#CONSOLIDATED_STATEMENTS_CASH_FLOWS)] | [removed: 55] [added: 58] |

| [Consolidated Statements of Stockholders’ Equity for the years ended April [removed: 26, 2019,] [added: 24, 2020,] April [removed: 27, 2018] [added: 26, 2019] and April [removed: 28, 2017](#CONSOLIDATED_STATEMENTS_STOCKHOLDERS_EQU)] [added: 27, 2018](#CONSOLIDATED_STATEMENTS_STOCKHOLDERS_EQU)] | [removed: 56] [added: 59] |

| [Notes to Consolidated Financial Statements](#NOTES_TO_CONSOLIDATED_FINANCIAL_STATEMEN) | [removed: 57] [added: 60] |

| [Selected Quarterly Financial Data (Unaudited)](#SELECTED_QUARTERLY_FINANCIAL_DATA_UNAUDI) | [removed: 88] [added: 90] |

| [Reports of Independent Registered Public Accounting Firm](#REPORT_INDEPENDENT_REGISTERED_PUBLIC_ACC) | [removed: 89] [added: 91] |

[removed: NETAPP, INC.][added: NETAPP, INC.]

| | | April [added: 24, 2020 | | | | April] 26, 2019 | | | | April 27, 2018 | | |

| Cash and cash equivalents | | $ | [removed: 2,325] [added: 2,658] | | | $ | [removed: 2,941] [added: 2,325] | |

| Short-term investments | | | [removed: 1,574] [added: 224] | | | | [removed: 2,450] [added: 1,574] | |

| Accounts receivable | | | [removed: 1,216] [added: 973] | | | | [removed: 1,047] [added: 1,216] | |

| Inventories | | | [removed: 131] [added: 145] | | | | [removed: 122] [added: 131] | |

| Other current assets | | | [removed: 364] [added: 274] | | | | [removed: 392] [added: 364] | |

| Total current assets | | | [removed: 5,610] [added: 4,274] | | | | [removed: 6,952] [added: 5,610] | |

| Property and equipment, net | | | [removed: 759] [added: 727] | | | | [removed: 756] [added: 759] | |

| Goodwill | | | [removed: 1,735] [added: 1,778] | | | | [removed: 1,739] [added: 1,735] | |

| Other intangible assets, net | | | [removed: 47] [added: 44] | | | | [removed: 94] [added: 47] | |

| Other non-current assets | | | [removed: 590] [added: 699] | | | | [removed: 450] [added: 590] | |

| Total assets | | $ | [removed: 8,741] [added: 7,522] | | | $ | [removed: 9,991] [added: 8,741] | |

| Accounts payable | | $ | [removed: 542] [added: 426] | | | $ | [removed: 609] [added: 542] | |

| Accrued expenses | | | [removed: 851] [added: 774] | | | | [removed: 825] [added: 851] | |

| Commercial paper notes | | | [removed: 249] [added: 522] | | | | [removed: 385] [added: 249] | |

| Current portion of long-term debt | | | [removed: 400] [added: —] | | | | [removed: —] [added: 400] | |

| Short-term deferred revenue and financed unearned services revenue | | | [removed: 1,825] [added: 1,894] | | | | [removed: 1,712] [added: 1,825] | |

| Total current liabilities | | | [removed: 3,867] [added: 3,616] | | | | [removed: 3,531] [added: 3,867] | |

| Long-term debt | | | [removed: 1,144] [added: 1,146] | | | | [removed: 1,541] [added: 1,144] | |

| Other long-term liabilities | | | [removed: 797] [added: 714] | | | | [removed: 992] [added: 797] | |

| Long-term deferred revenue and financed unearned services revenue | | | [removed: 1,843] [added: 1,804] | | | | [removed: 1,651] [added: 1,843] | |

| Total liabilities | | | [removed: 7,651] [added: 7,280] | | | | [removed: 7,715] [added: 7,651] | |

| Preferred stock, $0.001 par value, 5 shares authorized; no shares issued or outstanding as of April [removed: 26, 2019] [added: 24, 2020] or April [removed: 27, 2018] [added: 26, 2019] | | | — | | | | — | |

| Common stock and additional paid-in capital, $0.001 par value, 885 shares authorized; [removed: 240] [added: 219] and [removed: 263] [added: 240] shares issued and outstanding as of April [removed: 26, 2019] [added: 24, 2020] and April [removed: 27, 2018,] [added: 26, 2019,] respectively | | | [removed: 1,133] [added: 284] | | | | [removed: 2,355] [added: 1,133] | |

| Retained earnings [removed: (accumulated deficit)] | | | — | | | | [removed: (9] [added: —] | [removed: )] |

| Accumulated other comprehensive loss | | | [removed: (43] [added: (42] | ) | | | [removed: (70] [added: (43] | ) |

| Total stockholders' equity | | | [removed: 1,090] [added: 242] | | | | [removed: 2,276] [added: 1,090] | |

| Total liabilities and stockholders' equity | | $ | [removed: 8,741] [added: 7,522] | | | $ | [removed: 9,991] [added: 8,741] | |

| | | April [removed: 26, 2019] [added: 24, 2020] | | | | April [removed: 27, 2018] [added: 26, 2019] | | | | April [removed: 28, 2017] [added: 27, 2018] | | |

| Product | | $ | [removed: 3,755] [added: 2,995] | | | $ | [removed: 3,525] [added: 3,755] | | | $ | [removed: 3,060] [added: 3,525] | |

| Software maintenance | | | [removed: 946] [added: 1,034] | | | | [removed: 902] [added: 946] | | | | [removed: 905] [added: 902] | |

| Reclassification adjustments for gains included in net income | | | (6 | ) | | | (1 | ) | | | — | |

| Non-cash operating lease cost | | | 51 | | | | — | | | | — | |

| Repayments of debt | | | (410 | ) | | | — | | | | (750 | ) |

| Cumulative-effect of adoption of ASU 2016-16 | | | — | | | | — | | | | (51 | ) | | | — | | | | (51 | ) |

| Repurchase of common stock | | | (25 | ) | | | (625 | ) | | | (786 | ) | | | — | | | | (1,411 | ) |

| Balances, April 24, 2020 | | | 219 | | | $ | 284 | | | $ | — | | | $ | (42 | ) | | $ | 242 | |

We also elected the package of practical expedients that did not require us to reassess existing leases under the new guidance, and the practical expedient to not separate lease and non-lease components for all leases.

Adoption of the new standard during the first quarter of fiscal 2020 resulted in the recognition of approximately $149 million of operating lease ROU assets, net of deferred rent and lease restructuring liabilities, $158 million of lease liabilities, and a cumulative-effect adjustment to retained earnings of $6 million on our consolidated balance sheets.

Additional information is presented below and in Note 10 – Leases.

Actual results could differ materially from those estimates, including impacts from the COVID-19 pandemic, the anticipated effects of which have been incorporated, as applicable, into management’s estimates as of and for the year ended April 24, 2020.

impairment is other-than-temporary.

Triggering events for impairment reviews may be indicators such as adverse

method to determine the percentage of completion.

Leases − We determine if an arrangement is or contains a lease at inception, and we classify leases as operating or finance leases at commencement.

In our consolidated balance sheets, operating lease ROU assets are included in other non-current assets, while finance lease ROU assets are included in property and equipment, net.

Lease liabilities for both types of leases are included in accrued expenses and other long-term liabilities.

ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments over that term.

Operating and finance lease ROU assets and liabilities are recognized at commencement based on the present value of lease payments over the lease term.

ROU assets also include any lease payments made prior to lease commencement and exclude lease incentives.

The lease term is the noncancelable period of the lease and includes options to extend or terminate the lease when it is reasonably certain that an option will be exercised.

As the rate implicit in our leases is typically not readily determinable, in computing the present value of lease payments we generally use our incremental borrowing rate based on information available at the commencement date.

Variable lease payments not dependent on an index or rate are expensed as incurred and not included within the calculation of ROU assets and lease liabilities.

Lease expense for lease payments is recognized on a straight-line basis over the lease term.

We do not separate non-lease components from lease components for any class of leases, and we do not recognize ROU assets and lease liabilities for leases with a lease term of twelve months or less.

The fair value of PBRSUs that include a performance condition is remeasured when there is a change in management’s estimate of expected achievement relative to the performance target, resulting in the recognition of a cumulative adjustment of stock-based compensation expense.

The COVID-19 pandemic has led to an increase in market volatility and liquidity challenges for certain companies.

However, it has not currently resulted in a material increase in the credit risk associated with our financial instruments.

Fiscal 2020 Acquisitions

The preliminary acquisition date fair values of the assets acquired and liabilities assumed are as follows (in millions):

| Developed technology intangible asset | | | 6 | |

| Goodwill | | | 13 | |

| Total assets acquired | | | 29 | |

| Liabilities assumed | | | (6 | ) |

| Total purchase price | | $ | 23 | |

The acquisition date fair values of the assets acquired and liabilities assumed are as follows (in millions):

| Developed technology intangible asset | | | 26 | |

| Goodwill | | | 30 | |

| Total assets acquired | | | 58 | |

| Liabilities assumed | | | (5 | ) |

| Total purchase price | | $ | 53 | |

| --- | --- |

| --- | --- |

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

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

| Revenues: | | | | | | | | | | | | |

| Shares used in net income per share calculations: | | | | | | | | | | | | |

| Repayment of short-term loan | | | — | | | | — | | | | (850 | ) |

| Repayment of long-term debt | | | — | | | | (750 | ) | | | — | |

| Balances, April 29, 2016 | | | 281 | | | $ | 2,912 | | | $ | — | | | $ | (31 | ) | | $ | 2,881 | |

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

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

| Cumulative-effect of new accounting principle | | | — | | | | — | | | | (51 | ) | | | — | | | | (51 | ) |

In May 2014, the Financial Accounting Standards Board (FASB) issued a new standard, Revenue from Contracts with Customers (ASC 606), which establishes a comprehensive new revenue recognition model designed to depict the transfer of goods or services to a customer in an amount that reflects the consideration the entity expects to receive in exchange for those goods or services.

In the first quarter of fiscal 2019, we adopted this new standard using the full retrospective method of adoption.

Accordingly, our prior periods consolidated financial statements and information, as presented herein, have been restated to conform to the new rules.

Refer to Note 7 – Revenue for a summary of the impacts of adopting this standard.

In October 2016, the FASB issued an accounting standards update (ASU) which eliminates the deferred tax effects of intra-entity asset transfers other than inventory.

As a result, tax expense from the sale of an asset in the seller’s tax jurisdiction is recognized when the transfer occurs, even though the pre-tax effects of that transaction are eliminated in consolidation.

In the first quarter of fiscal 2019, we adopted this ASU using a modified retrospective transition approach and recorded a cumulative-effect adjustment to decrease retained earnings by $51 million, with a corresponding reduction of prepaid taxes, which were classified as other non-current assets on our consolidated balance sheets.

In November 2016, the FASB issued an ASU that requires a statement of cash flows to explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents.

In the first quarter of fiscal 2019, we adopted this ASU using a retrospective transition method.

Accordingly, our consolidated statements of cash flows for fiscal 2018 and fiscal 2017, as presented herein, have been restated to comply with the new requirements.

Refer to Note 6 – Supplemental Financial Information for a detail of the components of our cash, cash equivalents and restricted cash balances.

Actual results could differ materially from those estimates.

when events or circumstances indicate that their carrying amounts might be impaired.

While we are currently finalizing our implementation of new policies, processes and internal controls to comply with the new rules, we anticipate that the adoption of the new standard will result in the recognition of ROU assets and lease liabilities on our consolidated balance sheet of between $150 million and $170 million as of the beginning of the first quarter of fiscal 2020, primarily related to real estate.

This new standard will be effective for us in our first quarter of fiscal 2021, although early adoption is permitted.

Substantially all of the purchase price was recorded to goodwill.

Fiscal 2017 Acquisition

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

| Other purchased intangibles | | | — | | | | 3 | | | | 5 | | | Operating expenses |

| Cash | | $ | 2,216 | | | $ | 2,727 | |

| Cash equivalents | | | 109 | | | | 214 | |

| Long-term restricted cash | | | 1 | | | | 1 | |

| | | | 2,086 | | | | 2,004 | |

We will consummate the sale of these properties, and receive cash proceeds of $96 million, upon the completion of the second closing, which is expected to occur within the next 12 months.

That closing is subject to due diligence, certain termination rights and customary closing conditions, including local governmental approval of the subdivision of a land parcel.

Effective our first quarter of fiscal 2019, we adopted ASC 606 using the full retrospective method and have restated each prior reporting period presented to conform to the new rules.

Refer to Note 1 for a detailed discussion of accounting policies related to revenue recognition, including deferred commissions.

The most significant impact of the new standard relates to our accounting for arrangements containing software.

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: 26, 2019,] [added: 24, 2020,] the end of the fiscal period covered by this Annual Report on Form 10-K (the Evaluation Date).

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the criteria established in [removed: Internal] [added: *Internal] Control — Integrated Framework [removed: (2013)] [added: (2013)*] issued by the Committee of Sponsoring Organizations of the Treadway Commission.

Based on this assessment, our management concluded that, as of April [removed: 26, 2019,] [added: 24, 2020,] 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: 26, 2019] [added: 24, 2020] 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: 2019] [added: 2020] 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: 2019] [added: 2020] Annual Meeting of Stockholders, which will be filed with the Securities and Exchange Commission within 120 days of our year ended April [removed: 26, 2019.][added: 24, 2020.]

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: 2019] [added: 2020] Annual Meeting of Stockholders.

A copy of the code of ethics, which we refer to as our “Code of Conduct,” is available on our website at [removed: http://investors.netapp.com/governance.cfm.][added: http://netapp.com/us/media/code-of-conduct.pdf.]

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: 2019] [added: 2020] 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: 2019] [added: 2020] 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: 2019] [added: 2020] 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: 2019] [added: 2020] Annual Meeting of Stockholders.

| 10.14* | | [Form of Restricted Stock Unit Agreement (Employees) approved for use under the Company’s 1999 Stock option Plan, effective June [removed: 2019.](https://www.sec.gov/Archives/edgar/data/1002047/000156459019022779/ntap-ex1014_240.htm)] [added: 2019.](https://www.sec.gov/Archives/edgar/data/1002047/000156459020029349/ntap-ex1014_9.htm)] | | — | | — | | — | | — |

| 10.19* | | [Form of Restricted Stock Unit Agreement (Non-Employee Directors) approved for use under the Company’s 1999 Stock Option Plan, effective June [removed: 2019.](https://www.sec.gov/Archives/edgar/data/1002047/000156459019022779/ntap-ex1019_72.htm)] [added: 2019.](https://www.sec.gov/Archives/edgar/data/1002047/000156459020029349/ntap-ex1019_12.htm)] | | — | | — | | — | | — |

| 10.23* | | [Form of Restricted Stock Unit Agreement (Performance-Based) Total Stockholder Return approved for use under the Company’s 1999 Stock Option Plan, effective June [removed: 2019.](https://www.sec.gov/Archives/edgar/data/1002047/000156459019022779/ntap-ex1023_241.htm)] [added: 2019.](https://www.sec.gov/Archives/edgar/data/1002047/000156459020029349/ntap-ex1023_14.htm)] | | — | | — | | — | | — |

| 10.24* | | [Form of Restricted Stock Unit Agreement (Performance-Based) – Adjusted Operating Income approved for use under the Company’s 1999 Stock Option Plan, effective June [removed: 2019.](https://www.sec.gov/Archives/edgar/data/1002047/000156459019022779/ntap-ex1024_242.htm)] [added: 2019.](https://www.sec.gov/Archives/edgar/data/1002047/000156459020029349/ntap-ex1024_15.htm)] | | — | | — | | — | | — |

| 10.54 | | [Seventh Amendment to the Agreement of Purchase and Sale and Joint Escrow Instructions dated as of March 15, 2019 by and between the Company and Google [removed: LLC.](https://www.sec.gov/Archives/edgar/data/1002047/000156459019022779/ntap-ex1054_74.htm)] [added: LLC.](http://www.sec.gov/Archives/edgar/data/1002047/000156459019022779/ntap-ex1054_74.htm)] | | [removed: —] [added: 10-K] | | [removed: —] [added: 000-27130] | | [removed: —] [added: 10.54] | | [removed: —] [added: June 18, 2019] |

| 21.1 | | [Subsidiaries of the [removed: Company.](https://www.sec.gov/Archives/edgar/data/1002047/000156459019022779/ntap-ex211_76.htm)] [added: Company.](https://www.sec.gov/Archives/edgar/data/1002047/000156459020029349/ntap-ex211_13.htm)] | | — | | — | | — | | — |

| 23.1 | | [Consent of Independent Registered Public Accounting [removed: Firm.](https://www.sec.gov/Archives/edgar/data/1002047/000156459019022779/ntap-ex231_9.htm)] [added: Firm.](https://www.sec.gov/Archives/edgar/data/1002047/000156459020029349/ntap-ex231_6.htm)] | | — | | — | | — | | — |

| 31.1 | | [Certification of the Chief Executive Officer pursuant to Section 302(a) of the Sarbanes-Oxley Act of [removed: 2002.](https://www.sec.gov/Archives/edgar/data/1002047/000156459019022779/ntap-ex311_117.htm)] [added: 2002.](https://www.sec.gov/Archives/edgar/data/1002047/000156459020029349/ntap-ex311_11.htm)] | | — | | — | | — | | — |

| 31.2 | | [Certification of the Chief Financial Officer pursuant to Section 302(a) of the Sarbanes-Oxley Act of [removed: 2002.](https://www.sec.gov/Archives/edgar/data/1002047/000156459019022779/ntap-ex312_118.htm)] [added: 2002.](https://www.sec.gov/Archives/edgar/data/1002047/000156459020029349/ntap-ex312_10.htm)] | | — | | — | | — | | — |

| 32.1 | | [Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of [removed: 2002.](https://www.sec.gov/Archives/edgar/data/1002047/000156459019022779/ntap-ex321_119.htm)] [added: 2002.](https://www.sec.gov/Archives/edgar/data/1002047/000156459020029349/ntap-ex321_16.htm)] | | — | | — | | — | | — |

| 32.2 | | [Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of [removed: 2002.](https://www.sec.gov/Archives/edgar/data/1002047/000156459019022779/ntap-ex322_69.htm)] [added: 2002.](https://www.sec.gov/Archives/edgar/data/1002047/000156459020029349/ntap-ex322_7.htm)] | | — | | — | | — | | — |

| 101.SCH | | [added: Inline] XBRL Taxonomy Extension Schema Document | | — | | — | | — | | — |

| 101.CAL | | [added: Inline] XBRL Taxonomy Calculation Linkbase Document | | — | | — | | — | | — |

| 101.DEF | | [added: Inline] XBRL Taxonomy Extension Definition Linkbase Document | | — | | — | | — | | — |

| 101.LAB | | [added: Inline] XBRL Taxonomy Label Linkbase Document | | — | | — | | — | | — |

| 101.PRE | | [added: Inline] XBRL Taxonomy Extension Presentation Linkbase Document | | — | | — | | — | | — |

| Date: June [removed: 18, 2019] [added: 15, 2020] | | |

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints George Kurian and [removed: Ronald] [added: Michael] J.

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

| /s/ GEORGE KURIAN | | Chief Executive Officer and President (Principal Executive Officer and Principal Operating Officer) | | June [removed: 18, 2019] [added: 15, 2020] |

| /s/ [removed: RONALD] [added: MICHAEL] J. [removed: PASEK] [added: BERRY] | | Executive Vice President and Chief Financial Officer (Principal Financial [removed: Officer and Principal Accounting] Officer) | | June [removed: 18, 2019] [added: 15, 2020] |

| /s/ T. MICHAEL NEVENS | | Chairman of the Board | | June [removed: 18, 2019] [added: 15, 2020] |

| /s/ GERALD HELD | | Director | | June [removed: 18, 2019] [added: 15, 2020] |

| /s/ KATHRYN M. HILL | | Director | | June [removed: 18, 2019] [added: 15, 2020] |

| /s/ DEBORAH KERR | | Director | | June [removed: 18, 2019] [added: 15, 2020] |

| /s/ SCOTT SCHENKEL | | Director | | June [removed: 18, 2019] [added: 15, 2020] |

| /s/ GEORGE T. SHAHEEN | | Director | | June [removed: 18, 2019] [added: 15, 2020] |

| 4.5 | | [Description of Securities of the Company](https://www.sec.gov/Archives/edgar/data/1002047/000156459020029349/ntap-ex45_388.htm) | | — | | — | | — | | — |

| 10.55 | | [Separation Agreement dated August 14, 2019 by and between the Company and Joel Reich.](http://www.sec.gov/Archives/edgar/data/1002047/000156459019043736/ntap-ex101_49.htm) | | 10-Q | | 000-27130 | | 10.1 | | November 18, 2019 |

| 10.56 | | [Separation Agreement dated April 3, 2020 by and between the Company and Ronald Pasek.](https://www.sec.gov/Archives/edgar/data/1002047/000156459020029349/ntap-ex1056_89.htm) | | — | | — | | — | | — |

| 10.57 | | [Separation Agreement dated May 28, 2020 by and between the Company and Henri Richard.](https://www.sec.gov/Archives/edgar/data/1002047/000156459020029349/ntap-ex1057_210.htm) | | — | | — | | — | | — |

| 10.58 | | [Offer Letter for employment at the Company to César Cernuda, date March 23, 2020.](https://www.sec.gov/Archives/edgar/data/1002047/000156459020029349/ntap-ex1058_211.htm) | | — | | — | | — | | — |

| 101.INS | | Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document | | — | | — | | — | | — |

| 104 | | Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) | | | | | | | | |

| Michael J. Berry | | | | |

| /s/ SCOTT R. ALLEN Scott R. Allen | | Senior Vice President and Chief Accounting Officer (Principal Accounting Officer) | | June 15, 2020 |

| | | | | |

| /s/ DEEPAK AHUJA | | Director | | June 15, 2020 |

| Deepak Ahuja | | | | |

| 101.INS | | XBRL Instance Document | | — | | — | | — | | — |

| Ronald J. Pasek | | | | |

| /s/ RICHARD P. WALLACE | | Director | | June 18, 2019 |

| Richard P. Wallace | | | | |