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Supplemental Financial Statement Data
 9 Months Ended
Mar. 31, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Supplemental Financial Statement Data
Supplemental Financial Statement Data

Accounts receivable, net

From time to time, in connection with factoring agreements, the Company sells trade accounts receivable without recourse to third party purchasers in exchange for cash. During the three and nine months ended March 31, 2017, the Company did not sell any trade accounts receivable. During the three and nine months ended April 1, 2016, the Company sold trade accounts receivable and received cash proceeds of $35 million and $235 million, respectively. The discounts on the trade accounts receivable sold during the three and nine months ended April 1, 2016 were not material and were recorded within Other income (expense), net in the condensed consolidated statements of operations.

Inventories
 
March 31,
2017
 
July 1,
2016
 
(in millions)
Inventories:
 
 
 
Raw materials and component parts
$
581

 
$
569

Work-in-process
627

 
589

Finished goods
1,046

 
971

Total inventories
$
2,254

 
$
2,129



Property, plant, and equipment, net
 
March 31,
2017
 
July 1,
2016
 
(in millions)
Property, plant, and equipment:
 
 
 
Land and buildings
$
1,883

 
$
1,900

Machinery and equipment
7,008

 
6,915

Software
181

 
155

Furniture and fixtures
52

 
110

Leasehold improvements
305

 
307

Construction-in-process
115

 
245

Property, plant, and equipment, gross
9,544

 
9,632

Accumulated depreciation
(6,445
)
 
(6,129
)
Property, plant, and equipment, net
$
3,099

 
$
3,503



Goodwill
 
Carrying Amount
 
(in millions)
Balance at July 1, 2016
$
9,951

Purchase price adjustments to goodwill
64

Foreign currency translation adjustment
(3
)
Balance at March 31, 2017
$
10,012



The purchase price adjustments resulted from adjustments to the assessment of fair value for certain acquired intangible assets; inventory; property, plant and equipment; contingent liabilities; and deferred tax liability related to the acquisition of SanDisk Corporation (“SanDisk”).

Intangible assets
 
March 31,
2017
 
July 1,
2016
 
(in millions)
Finite-lived intangible assets
$
5,203

 
$
3,539

In-process research and development
695

 
2,435

Accumulated amortization
(1,754
)
 
(940
)
Intangible assets, net
$
4,144

 
$
5,034



Acquired in-process research and development (“IPR&D”) is accounted for as an indefinite-lived intangible asset. Upon completion of development, IPR&D is considered to be an amortizable finite-lived intangible asset. During the three months ended December 30, 2016, the Company reclassified $1.7 billion of acquired IPR&D to existing technology and commenced amortization over an estimated useful life of 4 years.

Product warranty liability

Changes in the warranty accrual were as follows:
 
Three Months Ended
 
Nine Months Ended
 
March 31,
2017
 
April 1,
2016
 
March 31,
2017
 
April 1,
2016
 
(in millions)
Warranty accrual, beginning of period
$
313

 
$
225

 
$
279

 
$
221

Charges to operations
43

 
36

 
134

 
124

Utilization
(36
)
 
(43
)
 
(116
)
 
(137
)
Changes in estimate related to pre-existing warranties
3

 
3

 
26

 
13

Warranty accrual, end of period
$
323

 
$
221

 
$
323

 
$
221



The long-term portion of the warranty accrual classified in Other liabilities was $127 million and $107 million as of March 31, 2017 and July 1, 2016, respectively.

Accumulated other comprehensive income (loss)

Other comprehensive income (loss) (“OCI”), net of tax refers to expenses, gains and losses that are recorded as an element of shareholders’ equity but are excluded from net income. The following table illustrates the changes in the balances of each component of Accumulated other comprehensive income (loss) (“AOCI”):
 
Actuarial Pension Gains (Losses)
 
Foreign Currency Translation Gains (Losses)
 
Unrealized Gains (Losses) on Foreign Exchange Contracts
 
Total AOCI
 
(in millions)
Balance at July 1, 2016
$
(45
)
 
$
74

 
$
74

 
$
103

OCI before reclassifications
7

 
(111
)
 
(48
)
 
(152
)
Amounts reclassified from AOCI
—

 
—

 
(47
)
 
(47
)
Income tax benefit (expense) related to items of OCI
(2
)
 
2

 
—

 
—

Net current-period OCI
5

 
(109
)
 
(95
)
 
(199
)
Balance at March 31, 2017
$
(40
)
 
$
(35
)
 
$
(21
)
 
$
(96
)


The following table illustrates the significant amounts of each component reclassified out of AOCI to the condensed consolidated statements of operations:
 
 
Three Months Ended
 
Nine Months Ended
 
 
AOCI Component
 
March 31,
2017
 
April 1,
2016
 
March 31,
2017
 
April 1,
2016
 
Statement of Operations Line Item
 
 
(in millions)
 
 
Unrealized holding gain (loss) on cash flow hedging activities:
 
 
 
 
 
 
 
 
 
 
Foreign exchange contracts
 
$
9

 
$
(8
)
 
$
42

 
$
(61
)
 
Cost of revenue
Foreign exchange contracts
 
(1
)
 
—

 
1

 
—

 
Research and development
Foreign exchange contracts
 
(3
)
 
—

 
4

 
—

 
Selling, general, and administrative
Unrealized holding gain (loss) on cash flow hedging activities
 
5

 
(8
)
 
47

 
(61
)
 
 
Total reclassifications for the period
 
$
5

 
$
(8
)
 
$
47

 
$
(61
)