Supplemental Financial Statement Data

3 Months Ended

Oct. 02, 2020

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 months ended October 2, 2020 and October 4, 2019, the Company sold trade accounts receivable and received cash proceeds of $128 million and $85 million, respectively. The discounts on the trade accounts receivable sold during the periods were not material and were recorded within Other income, net in the Condensed Consolidated Statements of Operations. As of October 2, 2020 and July 3, 2020, the amount of factored receivables that remained outstanding was $128 million and $113 million, respectively.

Inventories

	October 2, 2020		July 3, 2020
	(in millions)
Inventories:
Raw materials and component parts	$	1,426	$	1,306
Work-in-process	964		956
Finished goods	965		808
Total inventories	$	3,355	$	3,070

Property, plant and equipment, net

	October 2, 2020		July 3, 2020
	(in millions)
Property, plant and equipment:
Land	$	286	$	294
Buildings and improvements	1,865		1,837
Machinery and equipment	7,514		7,391
Computer equipment and software	430		429
Furniture and fixtures	52		52
Construction-in-process	327		297
Property, plant and equipment, gross	10,474		10,300
Accumulated depreciation	(7,577)		(7,446)
Property, plant and equipment, net	$	2,897	$	2,854

Goodwill

	Carrying Amount
	(in millions)
Balance at July 3, 2020	$	10,067
Foreign currency translation adjustment	2
Balance at October 2, 2020	$	10,069

Intangible assets

	October 2, 2020		July 3, 2020
	(in millions)
Finite-lived intangible assets	$	5,543	$	5,541
In-process research and development	80		80
Accumulated amortization	(4,865)		(4,680)
Intangible assets, net	$	758	$	941

As part of prior acquisitions, the Company recorded at the time of the acquisition acquired in-process research and development (“IPR&D”) for projects in progress that had not yet reached technological feasibility. IPR&D is initially accounted for as an indefinite-lived intangible asset. Once a project reaches technological feasibility, the Company reclassifies the balance to existing technology and begins to amortize the intangible asset over its estimated useful life.

Product warranty liability

Changes in the warranty accrual were as follows:

	Three Months Ended
	October 2, 2020		October 4, 2019
	(in millions)
Warranty accrual, beginning of period	$	408	$	350
Charges to operations	35		49
Utilization	(31)		(48)
Changes in estimate related to pre-existing warranties	(21)		6
Warranty accrual, end of period	$	391	$	357

The current portion of the warranty accrual is classified in Accrued expenses and the long-term portion is classified in Other liabilities as noted below:

	October 2, 2020		July 3, 2020
	(in millions)
Warranty accrual
Current portion (included in Accrued expenses)	$	191	$	205
Long-term portion (included in Other liabilities)	200		203
Total warranty accrual	$	391	$	408

Other liabilities

	October 2, 2020		July 3, 2020
	(in millions)
Other liabilities:
Non-current net tax payable	$	711	$	815
Payables related to unrecognized tax benefits	715		720
Other non-current liabilities	885		881
Total other liabilities	$	2,311	$	2,416

Accumulated other comprehensive income (loss)

Accumulated other comprehensive income (loss) (“AOCI”), 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 AOCI:

	Actuarial Pension Gains (Losses)		Foreign Currency Translation Adjustment		Unrealized Gains (Losses) on Derivative Contracts		Total Accumulated Comprehensive Income (Loss)
	(in millions)
Balance at July 3, 2020	$	(58)	$	(2)	$	(97)	$	(157)
Other comprehensive loss before reclassifications	1		32		18		51
Amounts reclassified from accumulated other comprehensive loss	—		—		12		12
Income tax benefit (expense) related to items of other comprehensive loss	—		—		(7)		(7)
Net current-period other comprehensive loss	1		32		23		56
Balance at October 2, 2020	$	(57)	$	30	$	(74)	$	(101)

During the three months ended October 2, 2020 and October 4, 2019, the amounts reclassified out of AOCI related to derivative contracts were substantially all charged to Cost of revenue in the Condensed Consolidated Statements of Operations.