Discontinued Operations (Tables)

9 Months Ended

Mar. 31, 2017

Discontinued Operations and Disposal Groups [Abstract]

Income Statement, Balance Sheet and Depreciation, Amortization, Capital Expenditures and Significant Operating and Investing Noncash Items

Depreciation and amortization, capital expenditures, and significant noncash items of discontinued operations for all periods presented in our Condensed Consolidated Statement of Income (Unaudited) included the following:

	Quarter Ended				Three Quarters Ended
	March 31, 2017		April 1, 2016		March 31, 2017		April 1, 2016
	(In millions)
Depreciation and amortization	$	11	$	19	$	47	$	67
Capital expenditures	—		11		5		16
Significant noncash items:
Impairment of goodwill and other assets	238		—		240		367
Gain on sale of CapRock commercial business	23		—		23		—

The following table presents assets and liabilities related to IT Services included in “Current assets of discontinued operations”, “Non-current assets of discontinued operations”, “Current liabilities of discontinued operations” and “Non-current liabilities of discontinued operations” in our Condensed Consolidated Balance Sheet (Unaudited) at March 31, 2017 and July 1, 2016:

	March 31, 2017 (1)		July 1, 2016
	(In millions)
Assets
Receivables	$	159	$	196
Inventories	84		83
Property, plant and equipment	19		—
Goodwill	259		—
Other intangible assets	261		—
Other current assets	10		6
Current assets of discontinued operations	$	792	$	285
Property, plant and equipment	$	—	$	18
Goodwill	—		487
Other intangible assets	—		287
Non-current deferred income taxes	—		4
Other non-current assets	—		2
Non-current assets of discontinued operations	$	—	$	798
Liabilities
Accounts payable	$	75	$	98
Advance payments and unearned income	25		20
Other current liabilities	68		40
Current liabilities of discontinued operations	$	168	$	158
Non-current liabilities of discontinued operations	$	—	$	13
(1) The assets and liabilities of IT Services held for sale were classified as current in our Condensed Consolidated Balance Sheet (Unaudited) as of March 31, 2017 because it was probable the sale would occur and proceeds would be collected within one year.

The following table presents the key financial results of IT Services included in “Discontinued operations, net of income taxes” in our Condensed Consolidated Statement of Income (Unaudited) for the quarter and three quarters ended March 31, 2017 and the quarter and three quarters ended April 1, 2016:

	Quarter Ended						Three Quarters Ended
	March 31, 2017			April 1, 2016			March 31, 2017			April 1, 2016
	(In millions)
Revenue from product sales and services	$	276		$	284		$	819		$	863
Cost of product sales and services	(236		)	(244		)	(698		)	(735		)
Engineering, selling and administrative expenses	(23		)	(22		)	(72		)	(62		)
Impairment of goodwill and other assets	(238		)	—			(240		)	—
Non-operating loss	(4		)	—			(4		)	—
Income (loss) before income taxes	(225		)	18			(195		)	66
Loss on sale of discontinued operation	(21		)	—			(28		)	—
Income tax (expense) benefit	94			(7		)	84			(24		)
Discontinued operations, net of income taxes	$	(152	)	$	11		$	(139	)	$	42

The following table presents assets and liabilities related to CapRock included in “Current assets of discontinued operations”, “Non-current assets of discontinued operations”, “Current liabilities of discontinued operations” and “Non-current liabilities of discontinued operations” in our Condensed Consolidated Balance Sheet (Unaudited) at March 31, 2017 and July 1, 2016:

	March 31, 2017		July 1, 2016
	(In millions)
Assets
Receivables	$	—	$	67
Inventories	—		14
Other current assets	—		31
Current assets of discontinued operations	$	—	$	112
Property, plant and equipment	$	—	$	73
Goodwill	—		136
Other intangible assets	—		24
Non-current deferred income taxes	—		43
Other non-current assets	—		3
Non-current assets of discontinued operations	$	—	$	279
Liabilities
Accounts payable	$	—	$	11
Advance payments and unearned income	—		5
Other current liabilities	15		44
Current liabilities of discontinued operations	$	15	$	60
Non-current liabilities of discontinued operations	$	—	$	26

The following table presents the key financial results of CapRock included in “Discontinued operations, net of income taxes” included in our Condensed Consolidated Statement of Income (Unaudited) for the quarter and three quarters ended March 31, 2017 and April 1, 2016:

	Quarter Ended					Three Quarters Ended
	March 31, 2017		April 1, 2016			March 31, 2017			April 1, 2016
	(In millions)
Revenue from product sales and services	$	—	$	85		$	144		$	281
Cost of product sales and services	—		(70		)	(108		)	(224		)
Engineering, selling and administrative expenses	—		(14		)	(23		)	(56		)
Impairment of goodwill and other assets	—		—			—			(367		)
Non-operating income	—		—			8			—
Income (loss) before income taxes	—		1			21			(366		)
Gain on sale of discontinued operation	23		—			23			—
Income tax (expense) benefit	47		(1		)	43			38
Discontinued operations, net of income taxes	$	70	$	—		$	87		$	(328	)

The major components of the discontinued operations in our Condensed Consolidated Statement of Income (Unaudited) include the following:

	Quarter Ended						Three Quarters Ended
	March 31, 2017			April 1, 2016			March 31, 2017			April 1, 2016
	(In millions)
Revenue from product sales and services	$	276		$	369		$	963		$	1,144
Cost of product sales and services	(236		)	(314		)	(806		)	(959		)
Engineering, selling and administrative expenses	(23		)	(36		)	(95		)	(118		)
Impairment of goodwill and other assets	(238		)	—			(240		)	(367		)
Non-operating income (loss) (1)	(4		)	(2		)	3			(2		)
Income (loss) before income taxes	(225		)	17			(175		)	(302		)
Gain (loss) on sale of discontinued operations, net (2)	5			—			(2		)	(21		)
Income tax (expense) benefit (3)	141			(8		)	127			18
Discontinued operations, net of income taxes	$	(79	)	$	9		$	(50	)	$	(305	)

(1) Non-operating income (loss) included losses of $1 million in the three quarters ended March 31, 2017, and $2 million in the quarter and three quarters ended April 1, 2016 related to Broadcast Communications.

(2) Gain (loss) on sale of discontinued operations, net included a $3 million reduction to the loss on sale of Broadcast Communications in the quarter and three quarters ended March 31, 2017, and an increase of $21 million to the loss on sale of Broadcast Communications in the three quarters ended April 1, 2016.

(3) Income tax (expense) benefit included a $4 million income tax benefit in the three quarters ended April 1, 2016 related to Broadcast Communications.

The carrying amounts of the major classes of assets and liabilities included in discontinued operations in our Condensed Consolidated Balance Sheet (Unaudited) as of March 31, 2017 and July 1, 2016, are as follows:

	March 31, 2017 (1)		July 1, 2016
	(In millions)
Assets
Receivables	$	159	$	263
Inventories	84		97
Property, plant and equipment	19		—
Goodwill	259		—
Other intangible assets	261		—
Other current assets	10		37
Current assets of discontinued operations	$	792	$	397
Property, plant and equipment	$	—	$	91
Goodwill	—		623
Non-current deferred income taxes	—		47
Other intangible assets	—		311
Other non-current assets	—		5
Non-current assets of discontinued operations	$	—	$	1,077
Liabilities
Accounts payable	$	75	$	109
Advance payments and unearned income	25		25
Other current liabilities (2)	86		114
Current liabilities of discontinued operations	$	186	$	248
Non-current liabilities of discontinued operations (3)	$	6	$	45

(1) The assets and liabilities of IT Services held for sale were classified as current in our Condensed Consolidated Balance Sheet (Unaudited) as of March 31, 2017 because it was probable the sale would occur and proceeds would be collected within one year.

(2) Other current liabilities included $3 million and $30 million of liabilities related to Broadcast Communications as of March 31, 2017 and July 1, 2016, respectively.

(3) Non-current liabilities of discontinued operations included $6 million of liabilities related to Broadcast Communications as of March 31, 2017 and July 1, 2016.