PENSION AND OTHER POSTRETIREMENT BENEFITS (Tables)

12 Months Ended

Jun. 30, 2017

Retirement Benefits [Abstract]

Schedule of fair value of deferred compensation plan investments and liabilities by category and by fair value hierarchy level

The following table provides the fair value of our deferred compensation plan investments and liabilities by category and by fair value hierarchy level as of June 30, 2017:

	Total		Level 1
	(In millions)
Assets
Deferred compensation plan investments: (1)
Equity security	$	37	$	37
Investments Measured at NAV:
Corporate-owned life insurance	25
Equity fund	50
Total	75
Total fair value of deferred compensation plan assets	$	112
Liabilities
Deferred compensation plan liabilities: (2)
Equity securities and mutual funds	$	46	$	46
Investments Measured at NAV:
Common/collective trusts and guaranteed investment contracts	80
Total fair value of deferred compensation plan liabilities	$	126

(1) Represents investments held in a Rabbi Trust associated with our non-qualified deferred compensation plans, which we include in the “Other current assets” and “Other non-current assets” line items in our Consolidated Balance Sheet.

(2) Primarily represents obligations to pay benefits under certain non-qualified deferred compensation plans, which we include in the “Compensation and benefits” and “Other long-term liabilities” line items in our Consolidated Balance Sheet. Under these plans, participants designate investment options (including money market, stock and fixed-income funds), which serve as the basis for measurement of the notional value of their accounts.

Summary of the funded status of defined benefit plans

The following table provides a summary of the funded status of our defined benefit plans and the presentation of such balances within our Consolidated Balance Sheet:

	June 30, 2017									July 1, 2016
	Pension			Other Benefits			Total			Pension			Other Benefits			Total
	(In millions)									(In millions)
Fair value of plan assets	$	4,921		$	212		$	5,133		$	4,273		$	216		$	4,489
Projected benefit obligation	(6,140		)	(265		)	(6,405		)	(6,471		)	(311		)	(6,782		)
Funded status	(1,219		)	(53		)	(1,272		)	(2,198		)	(95		)	(2,293		)
Amounts reported within:
Other non-current assets	9			—			9			5			—			5
Compensation and benefits	(2		)	(1		)	(3		)	(2		)	—			(2		)
Defined benefit plans	$	(1,226	)	$	(52	)	$	(1,278	)	$	(2,201	)	$	(95	)	$	(2,296	)

Summary of amounts recorded within accumulated other comprehensive loss

The following table provides a summary of pre-tax amounts recorded within accumulated other comprehensive loss:

	June 30, 2017							July 1, 2016
	Pension		Other Benefits			Total		Pension		Other Benefits			Total
	(In millions)							(In millions)
Net actuarial loss (gain)	$	262	$	(28	)	$	234	$	546	$	11		$	557
Net prior service cost (credit)	2		(1		)	1		3		(1		)	2
	$	264	$	(29	)	$	235	$	549	$	10		$	559

Schedule of changes in benefit obligation

The following table provides a roll-forward of the projected benefit obligations for our defined benefit plans:

	2017									2016
	Pension			Other Benefits			Total			Pension			Other Benefits			Total
	(In millions)									(In millions)
Change in benefit obligation
Benefit obligation at beginning of fiscal year	$	6,471		$	311		$	6,782		$	6,493		$	445		$	6,938
Service cost	58			1			59			75			1			76
Interest cost	184			8			192			245			13			258
Actuarial loss (gain)	(160		)	(32		)	(192		)	303			(2		)	301
Prior service cost (credit)(1)	—			—			—			3			(121		)	(118		)
Benefits paid	(376		)	(22		)	(398		)	(358		)	(24		)	(382		)
Settlements(2)	—			—			—			(244		)	—			(244		)
Special termination benefits	—			—			—			1			—			1
Expenses paid	(34		)	—			(34		)	(30		)	—			(30		)
Curtailments(3)(4)	—			(1		)	(1		)	(2		)	(1		)	(3		)
Foreign exchange	(3		)	—			(3		)	(15		)	—			(15		)
Benefit obligation at end of fiscal year	$	6,140		$	265		$	6,405		$	6,471		$	311		$	6,782

(1) We discontinued certain significantly underfunded post-employment benefit plans effective December 31, 2015. Under GAAP, this resulted in a negative plan amendment, curtailment and settlement during the year.

(2) We made lump sum distributions to participants covered under one of the Exelis Inc. excess pension plans that became payable within 90 days from the close of the acquisition on May 29, 2015. These distributions resulted in a settlement during the quarter ended October 2, 2015 and a net liability reduction of $244 million.

(3) We discontinued operations at one of our facilities during fiscal 2016, with the facility consolidation completed during the quarter ended July 1, 2016. Under GAAP, this resulted in a curtailment during the quarter ended January 1, 2016, and a net pension liability reduction of $2 million.

(4) We divested IT Services during fiscal 2017, which resulted in a curtailment under the Salaried Retiree Medical Plan.

Schedule of change in plan assets

The following table provides a roll-forward of the assets and the ending funded status of our defined benefit plans:

	2017									2016
	Pension			Other Benefits			Total			Pension			Other Benefits			Total
	(In millions)									(In millions)
Change in plan assets
Plan assets at beginning of fiscal year	$	4,273		$	216		$	4,489		$	4,500		$	257		$	4,757
Actual return on plan assets	470			22			492			1			(1		)	—
Employer contributions	591			(4		)	587			420			1			421
Benefits paid	(376		)	(22		)	(398		)	(358		)	(25		)	(383		)
Settlements	—			—			—			(244		)	—			(244		)
Expenses paid	(34		)	—			(34		)	(30		)	—			(30		)
Foreign exchange loss	(3		)	—			(3		)	(16		)	—			(16		)
Other(1)	—			—			—			—			(16		)	(16		)
Plan assets at end of fiscal year	$	4,921		$	212		$	5,133		$	4,273		$	216		$	4,489
Funded status at end of fiscal year	$	(1,219	)	$	(53	)	$	(1,272	)	$	(2,198	)	$	(95	)	$	(2,293	)

(1) We discontinued certain significantly underfunded post-employment benefit plans effective December 31, 2015. As a result, the remaining assets of the Employee Benefit Trust were designated for other employee benefit costs.

Schedule of accumulated and projected benefit obligations

The following table provides information for defined benefit pension plans with an accumulated benefit obligation in excess of plan assets:

	June 30, 2017		July 1, 2016
	(In millions)		(In millions)
Projected benefit obligation	$	6,061	$	6,390
Accumulated benefit obligation	6,061		6,379
Fair value of plan assets	4,833		4,187

Schedule of net benefit costs

The following table provides the components of net periodic benefit income and other amounts recognized in other comprehensive income for fiscal 2017, 2016, and 2015 as they pertain to our defined benefit plans:

	Pension									Other Benefits
	2017			2016			2015			2017			2016			2015
	(In millions)
Net periodic benefit income(1)
Service cost	$	58		$	75		$	7		$	1		$	1		$	1
Interest cost	184			245			23			8			13			2
Expected return on plan assets	(340		)	(347		)	(32		)	(17		)	(18		)	(2		)
Amortization of prior service credit	—			—			—			—			(5		)	(13		)
Amortization of net actuarial loss	1			1			1			—			1			6
Net periodic benefit income	(97		)	(26		)	(1		)	(8		)	(8		)	(6		)
Effect of curtailments, settlements or special termination benefits(2)	—			1			—			—			(121		)	—
Total net periodic benefit income	$	(97	)	$	(25	)	$	(1	)	$	(8	)	$	(129	)	$	(6	)
Other changes in plan assets and benefit obligations recognized in other comprehensive loss (income)
Net actuarial loss (gain)	$	(284	)	$	645		$	(117	)	$	(38	)	$	15		$	(5	)
Prior service cost (credit)(2)	—			3			—			—			(121		)	(19		)
Amortization of prior service credit	—			—			—			—			126			13
Amortization of net actuarial loss	(1		)	(1		)	(1		)	—			(2		)	(6		)
Total change recognized in other comprehensive loss (income)	(285		)	647			(118		)	(38		)	18			(17		)
Total impact from net periodic benefit cost and changes in other comprehensive loss (income)	$	(382	)	$	622		$	(119	)	$	(46	)	$	(111	)	$	(23	)

(1) Net periodic benefit income presented in this table includes both continuing and discontinued operations. $2 million and $4 million of the service cost component of net periodic benefit income is included as a component of the “Discontinued operations, net of income taxes” line item in our Consolidated Statement of Income for fiscal 2017 and fiscal 2016, respectively.

(2) We discontinued certain significantly underfunded post-employment benefit plans effective December 31, 2015. Under GAAP, this resulted in a negative plan amendment, curtailment and settlement during fiscal 2016.

Schedule of assumptions used

The following tables provide the weighted-average assumptions used to determine projected benefit obligations and net periodic benefit cost, as they pertain to our defined benefit pension plans:

Obligation assumptions as of:	June 30, 2017		July 1, 2016
Discount rate	3.76	%	3.62	%
Rate of future compensation increase	2.76	%	2.75	%
Cost assumptions for fiscal years:	2017		2016		2015
Discount rate to determine service cost	3.80	%	4.06	%	3.77	%
Discount rate to determine interest cost	2.94	%	4.06	%	3.77	%
Expected return on plan assets	7.65	%	7.91	%	7.93	%
Rate of future compensation increase	2.75	%	2.76	%	2.76	%

The following table provides the weighted-average assumptions used to determine projected benefit obligations and net periodic benefit cost, as they pertain to our other postretirement defined benefit plans:

Obligation assumptions as of:	June 30, 2017		July 1, 2016
Discount rate	3.63	%	3.41	%
Rate of future compensation increase	N/A		N/A
Cost assumptions for fiscal year:	2017		2016		2015
Discount rate to determine service cost	3.52	%	3.86	%	3.57	%
Discount rate to determine interest cost	2.60	%	3.86	%	3.57	%
Rate of future compensation increase	N/A		2.75	%	2.75	%

Schedule of the strategic target asset allocation ranges

The following table provides the current strategic target asset allocation ranges by asset category:

	Target Asset Allocation
Equity investments	45	%	—	75	%
Fixed income investments	20	%	—	42	%
Hedge funds	5	%	—	15	%
Cash and cash equivalents	0	%	—	10	%

The following table provides the fair value of plan assets held by our defined benefit plans by asset category and by fair value hierarchy level:

	June 30, 2017
	Total			Level 1		Level 2		Level 3
	(In millions)
Asset Category
Equities:
Domestic equities	$	1,062		$	1,032	$	30	$	—
International equities	838			834		4		—
Alternative investments:
Private equity funds	489			—		—		489
Hedge funds	242			—		—		242
Commodities and real estate	33			—		—		33
Fixed income:
Corporate bonds	611			—		611		—
Government securities	241			—		241		—
Other	2			—		—		2
Cash and cash equivalents	597			1		596		—
Total	4,115			$	1,867	$	1,482	$	766
Investments Measured at NAV
Equity funds	632
Fixed income funds	288
Total Investments Measured at NAV	920
Receivables, net	98
Total fair value of plan assets	$	5,133
	July 1, 2016
	Total			Level 1		Level 2		Level 3
	(In millions)
Asset Category
Equities:
Domestic equities	$	1,097		$	1,070	$	27	$	—
International equities	455			452		3		—
Alternative investments:
Private equity funds	664			—		—		664
Hedge funds	329			—		47		282
Commodities and real estate	36			—		—		36
Fixed income:
Corporate bonds	557			—		557		—
Government securities	166			—		166		—
Other	2			—		—		2
Cash and cash equivalents	197			31		166		—
Total	$	3,503		$	1,553	$	966	$	984
Investments Measured at NAV
Equity funds	582
Fixed income funds	405
Total Investments Measured at NAV	987
Payables, net	(1		)
Total fair value of plan assets	$	4,489

Reconciliation of defined benefit plan asset balances that use significant unobservable inputs

The following table presents a reconciliation of the beginning and ending defined benefit plan asset balances that use significant unobservable inputs (Level 3) to measure fair value:

	Private Equity Funds, Commodities and Real Estate			Hedge Funds			International Equities			Other			Total
							(In millions)
Level 3 balance — July 3, 2015	$	931		$	338		$	145		$	13		$	1,427
Realized gains (losses), net	109			(8		)	127			1			229
Unrealized losses, net	(121		)	(20		)	(137		)	(3		)	(281		)
Sales, net	(219		)	(28		)	(135		)	(9		)	(391		)
Level 3 balance — July 1, 2016	700			282			—			2			984
Realized gains (losses), net	78			(23		)	—			—			55
Unrealized gains (losses), net	(71		)	49			—			—			(22		)
Sales, net	(185		)	(66		)	—			—			(251		)
Level 3 balance — June 30, 2017	$	522		$	242		$	—		$	2		$	766

Schedule of estimated future benefit payments

The following table provides the projected timing of payments for benefits earned to date and benefits expected to be earned for future service by current active employees under our defined benefit plans:

	Pension		Other     Benefits (1)		Total
	(In millions)
Fiscal Years:
2018	$	391	$	26	$	417
2019	384		26		410
2020	386		25		411
2021	386		25		411
2022	386		24		410
2023 — 2027	1,891		102		1,993

(1) Projected payments for Other Benefits reflect gross payments from the Company, excluding subsidies, which are expected to approximate 10 percent of gross payments.