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Supplemental Financial Statement Data
 6 Months Ended
Dec. 27, 2013
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Supplemental Financial Statement Data
2. Supplemental Financial Statement Data
Inventories; Property, Plant and Equipment; and Other Intangible Assets
 
 
December 27,
2013
 
June 28,
2013
 
(in millions)
Inventories:
 
 
 
Raw materials and component parts
$
201

 
$
167

Work-in-process
581

 
575

Finished goods
511

 
446

Total inventories
$
1,293

 
$
1,188

Property, plant and equipment:
 
 
 
Property, plant and equipment
$
7,879

 
$
7,616

Accumulated depreciation
(4,370
)
 
(3,916
)
Property, plant and equipment, net
$
3,509

 
$
3,700

Other intangible assets:
 
 
 
Other intangible assets
$
1,060

 
$
948

Accumulated amortization
(453
)
 
(343
)
Other intangible assets, net
$
607

 
$
605



Warranty
The Company records an accrual for estimated warranty costs when revenue is recognized. The Company generally warrants its products for a period of one to five years. The warranty provision considers estimated product failure rates and trends, estimated replacement costs, estimated repair costs which include scrap costs, and estimated costs for customer compensatory claims related to product quality issues, if any. A statistical warranty tracking model is used to help prepare estimates and assist the Company in exercising judgment in determining the underlying estimates. The statistical tracking model captures specific detail on hard drive reliability, such as factory test data, historical field return rates, and costs to repair by product type. Management’s judgment is subject to a greater degree of subjectivity with respect to newly introduced products because of limited field experience with those products upon which to base warranty estimates. Management reviews the warranty accrual quarterly for products shipped in prior periods and which are still under warranty. Any changes in the estimates underlying the accrual may result in adjustments that impact current period gross profit and income. Such changes are generally a result of differences between forecasted and actual return rate experience and costs to repair. If actual product return trends, costs to repair returned products or costs of customer compensatory claims differ significantly from estimates, future results of operations could be materially affected. Changes in the warranty accrual were as follows (in millions):
 
Three Months
Ended
 
Six Months
Ended
 
December 27,
2013
 
December 28, 2012
 
December 27,
2013
 
December 28, 2012
Warranty accrual, beginning of period
$
195

 
$
230

 
$
187

 
$
260

Warranty liability assumed as a result of acquisition (see Note 11)
1

 
—

 
4

 
—

Charges to operations
44

 
44

 
84

 
90

Utilization
(57
)
 
(51
)
 
(106
)
 
(111
)
Changes in estimate related to pre-existing warranties
7

 
(12
)
 
21

 
(28
)
Warranty accrual, end of period
$
190

 
$
211

 
$
190

 
$
211


The long-term portion of the warranty accrual classified in other liabilities was $73 million at both December 27, 2013 and June 28, 2013.
Other Comprehensive Income (Loss)
Other comprehensive income (loss) refers to revenue, expenses, gains and losses that are recorded as an element of shareholders’ equity but are excluded from net income. The Company’s other comprehensive income (loss) is comprised of unrealized gains and losses on foreign exchange contracts and actuarial gains and losses related to pensions. The income tax impact on components of other comprehensive income is immaterial for all periods presented.
The following table illustrates the changes in the balances of each component of accumulated other comprehensive income for the six months ended December 27, 2013 (in millions):
 
Actuarial Pension Gain (Loss)
 
Foreign Currency Translation Gain (Loss)
 
Unrealized Gain (Loss) on Foreign Exchange Contracts
 
Accumulated Other Comprehensive Income (Loss)
Balance at June 28, 2013
$
11

 
$
—

 
$
(46
)
 
$
(35
)
Other comprehensive income before reclassifications
—

 
—

 
(11
)
 
(11
)
Amounts reclassified from accumulated other comprehensive income
—

 
—

 
(3
)
 
(3
)
Net current-period other comprehensive income
—

 
—

 
(14
)
 
(14
)
Balance at December 27, 2013
$
11

 
$
—

 
$
(60
)
 
$
(49
)

The following table illustrates the changes in the balances of each component of accumulated other comprehensive income for the six months ended December 28, 2012 (in millions):
 
Actuarial Pension Gain (Loss)
 
Foreign Currency Translation Gain (Loss)
 
Unrealized Gain (Loss) on Foreign Exchange Contracts
 
Accumulated Other Comprehensive Income (Loss)
Balance at June 29, 2012
$
(3
)
 
$
4

 
$
(16
)
 
$
(15
)
Other comprehensive income before reclassifications
1

 
—

 
45

 
46

Amounts reclassified from accumulated other comprehensive income
—

 
(4
)
 
(19
)
 
(23
)
Net current-period other comprehensive income
1

 
(4
)
 
26

 
23

Balance at December 28, 2012
$
(2
)
 
$
—

 
$
10

 
$
8