INCOME TAXES (Tables)

12 Months Ended

Jun. 28, 2019

Schedule of Provision for Current and Deferred Income Taxes

The provisions for current and deferred income taxes are summarized as follows:



	2019			2018			2017

	(In millions)
Current:
United States	$	105		$	(141	)	$	117
International	9			12			9
State and local	8			(11		)	6
	122			(140		)	132
Deferred:
United States	15			324			121
International	(3		)	(3		)	1
State and local	26			25			7
	38			346			129
	$	160		$	206		$	261

Schedule of Provision for Income Taxes

The total income tax provision is summarized as follows:



	2019			2018			2017

	(In millions)
Continuing operations	$	160		$	206		$	261
Discontinued operations	(1		)	(5		)	(110		)
Total income tax provision	$	159		$	201		$	151

Schedule of Reconciliation of the United States Statutory to Effective Income Tax Rate

A reconciliation of the U.S. statutory income tax rate to our effective income tax rate follows:



	2019		2018		2017
U.S. statutory income tax rate	21.0	%	28.1	%	35.0	%
State taxes	2.4		1.9		1.0
International income	(0.5	)	(0.5	)	(1.3	)
Research and development tax credit	(4.5	)	(2.9	)	(2.0	)
Foreign derived intangibles income deduction	(1.3	)	—		—
Change in valuation allowance	(1.8	)	0.2		(0.2	)
U.S. production activity benefit	—		(0.9	)	(0.5	)
Excess tax benefits on equity-based compensation	(2.2	)	(1.8	)	(2.6	)
Settlement of tax audits	—		(2.2	)	—
U.S. tax reform	—		0.4		—
Other items	1.3		0.4		(0.1	)
Effective income tax rate	14.4	%	22.7	%	29.3	%

Schedule of Components of Deferred Income Tax Assets (Liabilities)

The components of deferred income tax assets (liabilities) were as follows:



	June 28, 2019			June 29, 2018

	(In millions)
Deferred tax assets:
Inventory valuations	$	24		$	21
Accruals	152			178
Deferred revenue	12			7
Domestic tax loss and credit carryforwards	54			86
International tax loss and credit carryforwards	38			33
Share-based compensation	28			26
Capital loss carryforwards	95			101
Pension and other post-employment benefits	305			188
Unrealized loss on interest rate hedges	13			7
Unrecognized tax benefits	4			4
Other	10			13
Total deferred tax assets	735			664
Less: valuation allowance⁽¹⁾	(159		)	(181		)
Total deferred tax assets, net of valuation allowance	576			483

Deferred tax liabilities:
Property, plant and equipment	(71		)	(65		)
Unbilled receivables	(65		)	(86		)
Acquired intangibles	(260		)	(268		)
Unremitted earnings of foreign subsidiaries	(19		)	(24		)
Total deferred tax liabilities	(415		)	(443		)
Total deferred tax assets, net of valuation allowance	$	161		$	40

_______________

(1) The valuation allowance has been established to offset certain domestic and foreign deferred tax assets due to uncertainty regarding our ability to realize them in the future.

Schedule of Deferred Tax Assets, Net of Valuation Allowance

Total deferred tax assets, net of valuation allowance, were classified as follows in our Consolidated Balance Sheet:



	June 28, 2019			June 29, 2018

	(In millions)
Non-current deferred income tax assets	$	173		$	119
Non-current deferred income tax liabilities	(12		)	(79		)
	$	161		$	40

Schedule of Reconciliation of Beginning and Ending Amounts of Unrecognized Tax Benefits

A reconciliation of the beginning and ending amounts of unrecognized tax benefits is as follows:



	2019			2018			2017

	(In millions)
Balance at beginning of fiscal year	$	102		$	90		$	63
Additions based on tax positions taken during current fiscal year	31			17			52
Additions based on tax positions taken during prior fiscal years	80			23			—
Decreases based on tax positions taken during prior fiscal years	(9		)	(28		)	(25		)
Balance at end of fiscal year	$	204		$	102		$	90