2. Supplemental Financial Statement Data

Accounts Receivable

From time to time, in connection with a factoring agreement, the Company sells trade accounts receivable without recourse to a third party purchaser in exchange for cash. The Company sold trade accounts receivable and received cash proceeds of $200 million during the three months ended October 2, 2015. The Company did not sell trade accounts receivable during the three months ended October 3, 2014. The discounts on the sales of trade accounts receivable were not material and were recorded within interest and other expense in the condensed consolidated statements of income.

Inventories; Property, Plant and Equipment; and Other Intangible Assets



	October 2, 2015			July 3, 2015
	(in millions)
Inventories:
Raw materials and component parts	$	135		$	168
Work-in-process	507			500
Finished goods	618			700
Total inventories	$	1,260		$	1,368
Property, plant and equipment:
Property, plant and equipment	$	8,635		$	8,604
Accumulated depreciation	(5,745		)	(5,639		)
Property, plant and equipment, net	$	2,890		$	2,965
Other intangible assets:
Other intangible assets	$	1,018		$	1,008
Accumulated amortization	(699		)	(676		)
Other intangible assets, net	$	319		$	332

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 product 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
	October 2, 2015			October 3, 2014
Warranty accrual, beginning of period	$	221		$	182
Charges to operations	45			49
Utilization	(54		)	(49		)
Changes in estimate related to pre-existing warranties	6			19
Warranty accrual, end of period	$	218		$	201

The long-term portion of the warranty accrual classified in other liabilities was $77 million as of October 2, 2015 and $71 million as of July 3, 2015.

Investments

The following tables summarize, by major type, the fair value and cost basis of the Company’s investments (in millions):



	As of October 2, 2015
	Cost Basis		Unrealized Gains		Fair Value
Available-for-sale securities:
U.S. Treasury securities	279		1		280
U.S. Government agency securities	116		—		116
Commercial paper	86		—		86
Certificates of deposit	221		—		221
Total	$	702	$	1	$	703



	As of July 3, 2015
	Cost Basis		Unrealized Gains (Losses)		Fair Value
Available-for-sale securities:
U.S. Treasury securities	$	287	$	—	$	287
U.S. Government agency securities	95		—		95
Commercial paper	109		—		109
Certificates of deposit	99		—		99
Total	$	590	$	—	$	590

The fair value of the Company’s investments classified as available-for-sale securities at October 2, 2015, by remaining contractual maturity, were as follows (in millions):



	Cost Basis		Fair Value
Due in less than one year (short-term investments):	$	347	$	347
Due in one to five years (included in other non-current assets):	355		356
Total	$	702	$	703

The Company determined no available-for-sale securities were other-than-temporarily impaired during the three months ended October 2, 2015 and October 3, 2014. For more information on the Company's available-for-sale securities, see Note 7 to these condensed consolidated financial statements.

From time to time, the Company enters into certain strategic investments for the promotion of business and strategic objectives. These strategic investments are recorded at cost within other non-current assets in the condensed consolidated balance sheets and were not material to the condensed consolidated financial statements as of October 2, 2015 and July 3, 2015.

Other Comprehensive Loss, Net of Tax

Other comprehensive loss, net of tax refers to revenue, expenses, gains and losses that are recorded as an element of shareholders’ equity but are excluded from net income. 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 loss for the three months ended October 2, 2015 (in millions):



	Actuarial Pension Gain		Unrealized Gain (Loss) on Foreign Exchange Contracts			Unrealized Gain on Available for Sale Securities		Accumulated Other Comprehensive Income (Loss)
Balance at July 3, 2015	$	5	$	(25	)	$	—	$	(20	)
Other comprehensive loss before reclassifications	—		(53		)	1		(52		)
Amounts reclassified from accumulated other comprehensive income	—		28			—		28
Net current-period other comprehensive loss	—		(25		)	1		(24		)
Balance at October 2, 2015	$	5	$	(50	)	$	1	$	(44	)

The following table illustrates the changes in the balances of each component of accumulated other comprehensive loss for the three months ended October 3, 2014 (in millions):



	Actuarial Pension Gain		Unrealized Gain (Loss) on Foreign Exchange Contracts			Unrealized Gain (Loss) on Available for Sale Securities		Accumulated Other Comprehensive Income (Loss)
Balance at June 27, 2014	$	7	$	5		$	—	$	12
Other comprehensive loss before reclassifications	—		(22		)	—		(22		)
Amounts reclassified from accumulated other comprehensive loss	—		(4		)	—		(4		)
Net current-period other comprehensive loss	—		(26		)	—		(26		)
Balance at October 3, 2014	$	7	$	(21	)	$	—	$	(14	)