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PENSION AND OTHER POSTRETIREMENT BENEFITS (Tables)
 6 Months Ended
Jan. 03, 2020
Retirement Benefits [Abstract]  
Schedule of Fair Value of Deferred Compensation Plan Investments and Liabilities by Category and 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:
 
January 3, 2020
 
June 28, 2019
 
June 29, 2018
 
Total
 
Level 1
 
Total
 
Level 1
 
Total
 
Level 1
 
 
 
 
 
 
 
 
 
 
 
 
 
(In millions)
Assets
 
 
 
 
 
 
 
 
 
 
 
Deferred compensation plan assets:(1)
 
 
 
 
 
 
 
 
 
 
 
Equity and fixed income securities(2)
$
58

 
$
58

 
$
99

 
$
99

 
$
109

 
$
109

Investments measured at NAV:
 
 
 
 
 
 
 
 
 
 
 
Corporate-owned life insurance
29

 
 
 
28

 
 
 
27

 
 
Total fair value of deferred compensation plan assets
$
87

 
 
 
$
127

 
 
 
$
136

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
 
 
 
 
 
Deferred compensation plan liabilities:(3)
 
 
 
 
 
 
 
 
 
 
 
Equity securities and mutual funds
$
2

 
$
2

 
$
25

 
$
25

 
$
38

 
$
38

Investments measured at NAV:
 
 
 
 
 
 
 
 
 
 
 
Common/collective trusts and guaranteed investment contracts
69

 
 
 
132

 
 
 
111

 
 
Total fair value of deferred compensation plan liabilities
$
71

 
 
 
$
157

 
 
 
$
149

 
 

_______________
(1)
Represents diversified assets 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, and which are measured at fair value.
(2)
We have reclassified certain prior-year amounts to conform with current period classifications. Reclassifications include certain equity and fixed income funds that were previously included under “Investments Measured at NAV” and are now reflected in “Equity and fixed income securities” under “Level 1.”
(3)
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 stock and fixed-income funds), which serve as the basis for measurement of the notional value of their accounts.
Schedule of 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:
 
January 3, 2020
 
June 28, 2019
 
June 29, 2018
 
Pension
 
Other
Benefits
 
Pension
 
Other
Benefits
 
Pension
 
Other
Benefits
 
 
 
 
 
 
 
 
 
 
 
 
 
(In millions)
Fair value of plan assets
$
8,618

 
$
274

 
$
4,958

 
$
201

 
$
5,098

 
$
207

Projected benefit obligation
(10,268
)
 
(369
)
 
(6,123
)
 
(221
)
 
(5,774
)
 
(233
)
Funded status
$
(1,650
)
 
$
(95
)
 
$
(1,165
)
 
$
(20
)
 
$
(676
)
 
$
(26
)
Consolidated Balance Sheet line item amounts:
Other non-current assets
$
91

 
$
1

 
$
12

 
$
—

 
$
15

 
$
—

Compensation and benefits
(10
)
 
(8
)
 
(7
)
 
—

 
(2
)
 
(1
)
Liabilities of disposal group held for sale
—

 
—

 
(16
)
 
—

 
—

 
—

Defined benefit plans
(1,731
)
 
(88
)
 
(1,154
)
 
(20
)
 
(689
)
 
(25
)
Schedule of Estimated Net Defined Benefits Costs to be Amortized from AOCI The following table provides a summary of pre-tax amounts recorded within accumulated other comprehensive loss:
 
January 3, 2020
 
June 28, 2019
 
June 29, 2018
 
Pension
 
Other
Benefits
 
Pension
 
Other
Benefits
 
Pension
 
Other
Benefits
 
 
 
 
 
 
 
 
 
 
 
 
 
(In millions)
Net actuarial loss (gain)
$
819

 
$
(34
)
 
$
781

 
$
(36
)
 
$
156

 
$
(46
)
Net prior service cost (credit)
(282
)
 
(1
)
 
6

 
(1
)
 
4

 
(1
)
 
$
537

 
$
(35
)
 
$
787

 
$
(37
)
 
$
160

 
$
(47
)

The following table provides estimated amounts for net actuarial gain and prior service cost to be amortized from accumulated other comprehensive loss into net periodic benefit income during the next twelve months for plans in existence as of January 3, 2020.
 
Pension
 
Other
Benefits
 
Total
 
 
 
 
 
 
 
(In millions)
Net actuarial (gain) loss
$
10

 
$
(3
)
 
$
7

Prior service cost
(28
)
 
—

 
(28
)
 
$
(18
)
 
$
(3
)
 
$
(21
)
Schedule of Roll-forward of Projected Benefit Obligation
The following table provides a roll-forward of the projected benefit obligations for our defined benefit plans:
 
January 3, 2020
 
June 28, 2019
 
June 29, 2018
 
Pension
 
Other
Benefits
 
Pension
 
Other
Benefits
 
Pension
 
Other
Benefits
 
 
 
 
 
 
 
 
 
 
 
 
 
(In millions)
Change in benefit obligation
 
 
 
 
 
 
 
 
 
 
 
Benefit obligation at beginning of fiscal year
$
6,123

 
$
221

 
$
5,774

 
$
233

 
$
6,140

 
$
265

Benefit obligation assumed in L3Harris Merger
4,474

 
156

 
—

 
—

 
—

 
—

Service cost
42

 
1

 
36

 
—

 
39

 
1

Interest cost
149

 
5

 
209

 
8

 
195

 
7

Actuarial loss (gain)
301

 
7

 
514

 
(1
)
 
(169
)
 
(22
)
Amendments
(292
)
 
—

 
3

 
—

 
2

 
—

Benefits paid
(342
)
 
(21
)
 
(381
)
 
(19
)
 
(402
)
 
(18
)
Settlements
(5
)
 
—

 
—

 
—

 
—

 
—

Expenses paid
(43
)
 
—

 
(30
)
 
—

 
(35
)
 
—

Curtailments
(35
)
 
—

 
1

 
—

 
—

 
—

Foreign currency exchange rate changes
3

 
—

 
(3
)
 
—

 
4

 
—

Plan participants' contributions
1

 
—

 
—

 
—

 
—

 
—

Divestiture
(108
)
 
—

 
—

 
—

 
—

 
—

Benefit obligation at end of fiscal year
$
10,268

 
$
369

 
$
6,123

 
$
221

 
$
5,774

 
$
233
Schedule of Roll-forward of Plan Assets
The following table provides a roll-forward of the assets and the ending funded status of our defined benefit plans:
 
January 3, 2020
 
June 28, 2019
 
June 29, 2018
 
Pension
 
Other
Benefits
 
Pension
 
Other
Benefits
 
Pension
 
Other
Benefits
 
 
 
 
 
 
 
 
 
 
 
 
 
(In millions)
Change in plan assets
 
 
 
 
 
 
 
 
 
 
 
Plan assets at beginning of fiscal year
$
4,958

 
$
201

 
$
5,098

 
$
207

 
$
4,921

 
$
212

Plan assets acquired in L3Harris Merger
3,183

 
68

 
—

 
—

 
—

 
—

Actual return on plan assets
548

 
18

 
271

 
11

 
307

 
14

Employer contributions
406

 
8

 
3

 
2

 
303

 
(1
)
Benefits paid
(342
)
 
(21
)
 
(381
)
 
(19
)
 
(402
)
 
(18
)
Settlements
(5
)
 
—

 
—

 
—

 
—

 
—

Expenses paid
(43
)
 
—

 
(30
)
 
—

 
(35
)
 
—

Foreign currency exchange rate changes
4

 
—

 
(3
)
 
—

 
4

 
—

Plan participants' contributions
1

 
—

 
—

 
—

 
—

 
—

Divestiture
(92
)
 
—

 
—

 
—

 
—

 
—

Plan assets at end of fiscal year
$
8,618

 
$
274

 
$
4,958

 
$
201

 
$
5,098

 
$
207

 
 
 
 
 
 
 
 
 
 
 
 
Funded status at end of fiscal year
$
(1,650
)
 
$
(95
)
 
$
(1,165
)
 
$
(20
)
 
$
(676
)
 
$
(26
)
Schedule of Accumulated Benefit Obligations The following table provides information for defined benefit pension plans with an accumulated benefit obligation in excess of plan assets:
 
January 3, 2020
 
June 28, 2019
 
June 29, 2018
 
 
 
 
 
 
 
(In millions)
Projected benefit obligation
$
9,670

 
$
6,041

 
$
5,694

Accumulated benefit obligation
9,656

 
6,041

 
5,694

Fair value of plan assets
7,931

 
4,864

 
5,004
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 the two quarters ended January 3, 2020 and fiscal 2019, 2018 and 2017 as they pertain to our defined benefit plans:
 
Pension
 
Two Quarters Ended
 
Fiscal Years Ended
 
January 3, 2020
 
June 28, 2019
 
June 29, 2018
 
June 30, 2017
 
 
 
 
 
 
 
 
 
(In millions)
Net periodic benefit income
 
 
 
 
 
 
 
Service cost
$
42

 
$
36

 
$
39

 
$
58

Interest cost
149

 
209

 
195

 
184

Expected return on plan assets
(314
)
 
(382
)
 
(369
)
 
(340
)
Amortization of net actuarial loss (gain)
1

 
—

 
—

 
1

Amortization of prior service credit
(5
)
 
—

 
—

 
—

Effect of curtailments or settlements(1)
(18
)
 
1

 
—

 
—

Net periodic benefit income
$
(145
)
 
$
(136
)
 
$
(135
)
 
$
(97
)
Other changes in plan assets and benefit obligations recognized in other comprehensive loss
 
 
 
 
 
 
 
Net actuarial loss (gain)
$
55

 
$
625

 
$
(106
)
 
$
(284
)
Prior service (credit) cost
(292
)
 
3

 
2

 
—

Amortization of net actuarial gain (loss)
(5
)
 
—

 
—

 
(1
)
Amortization of prior service credit (cost)
5

 
(1
)
 
—

 
—

Recognized net loss due to divestiture
(13
)
 
—

 
—

 
—

Total change recognized in other comprehensive loss
(250
)
 
627

 
(104
)
 
(285
)
Total impact from net periodic benefit cost and changes in other comprehensive loss
$
(395
)
 
$
491

 
$
(239
)
 
$
(382
)
_______________
(1)
Effective January 1, 2020, for certain acquired L3 U.S. defined benefit pension plans, benefit accruals were frozen and replaced with a 1% cash balance benefit formula for certain employees who were not considered highly compensated on December 31, 2018. During the two quarters ended January 3, 2020, we recognized a $23 million curtailment gain as a result of this change, and a $5 million settlement loss resulting from the payout of the liabilities of a non-qualified benefit plan due to the change in control provisions.
 
Other Benefits
 
Two Quarters Ended
 
Fiscal Years Ended
 
January 3, 2020
 
June 28, 2019
 
June 29, 2018
 
June 30, 2017
 
 
 
 
 
 
 
 
 
(In millions)
Net periodic benefit income
 
 
 
 
 
 
 
Service cost
$
1

 
$
—

 
$
1

 
$
1

Interest cost
5

 
8

 
7

 
8

Expected return on plan assets
(10
)
 
(16
)
 
(16
)
 
(17
)
Amortization of net actuarial loss (gain)
(3
)
 
(6
)
 
(1
)
 
—

Net periodic benefit income
$
(7
)
 
$
(14
)
 
$
(9
)
 
$
(8
)
Other changes in plan assets and benefit obligations recognized in other comprehensive loss
 
 
 
 
 
 
 
Net actuarial loss (gain)
$
(1
)
 
$
4

 
$
(20
)
 
$
(38
)
Amortization of net actuarial gain (loss)
3

 
6

 
1

 
—

Total change recognized in other comprehensive loss
2

 
10

 
(19
)
 
(38
)
Total impact from net periodic benefit cost and changes in other comprehensive loss
$
(5
)
 
$
(4
)
 
$
(28
)
 
$
(46
)
Schedule of Weighted-average Assumptions Used
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 in existence as of January 3, 2020:
Obligation assumptions as of:
January 3, 2020
 
June 28, 2019
 
June 29, 2018
 
 
Discount rate
2.97
%
 
3.21
%
 
3.99
%
 
 
Rate of future compensation increase
N/A

 
N/A

 
N/A

 
 
 
 
 
 
 
 
 
 
Cost assumptions for fiscal periods ended:
January 3, 2020
 
June 28, 2019
 
June 29, 2018
 
June 30, 2017
Discount rate to determine service cost
3.47
%
 
4.14
%
 
3.62
%
 
3.52
%
Discount rate to determine interest cost
2.74
%
 
3.62
%
 
3.04
%
 
2.60
%
Rate of future compensation increase
N/A

 
N/A

 
N/A

 
N/A


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 in existence as of January 3, 2020:
Obligation assumptions as of:
January 3, 2020
 
June 28, 2019
 
June 29, 2018
 
 
Discount rate
3.14
%
 
3.35
%
 
4.05
%
 
 
Rate of future compensation increase
2.80
%
 
2.76
%
 
2.76
%
 
 
 
 
 
 
 
 
 
 
Cost assumptions for fiscal periods ended:
January 3, 2020
 
June 28, 2019
 
June 29, 2018
 
June 30, 2017
Discount rate to determine service cost
3.11
%
 
3.89
%
 
3.48
%
 
3.80
%
Discount rate to determine interest cost
2.94
%
 
3.75
%
 
3.28
%
 
2.94
%
Expected return on plan assets
7.68
%
 
7.66
%
 
7.66
%
 
7.65
%
Rate of future compensation increase
2.97
%
 
2.76
%
 
2.76
%
 
2.75
%
Schedule of Strategic Target Assets Allocation and Fair Value of Plan Assets
The following tables provide the fair value of plan assets held by our defined benefit plans by asset category and by fair value hierarchy level:
 
January 3, 2020
 
Total
 
Level 1
 
Level 2
 
Level 3
 
 
 
 
 
 
 
 
 
(In millions)
Asset Category
 
 
 
 
 
 
 
Equities:
 
 
 
 
 
 
 
Domestic equities
$
2,968

 
$
2,968

 
$
—

 
$
—

International equities
1,217

 
1,217

 
—

 
—

Real Estate Investment Trusts
211

 
211

 
—

 
—

Fixed income:
 
 
 
 
 
 
 
Corporate bonds
1,176

 
—

 
1,159

 
17

Government securities
489

 
—

 
489

 
—

Securitized Assets
131

 
—

 
131

 
—

Fixed Income Funds
101

 
101

 
—

 
—

Other
2

 
—

 
—

 
2

Cash and cash equivalents
691

 
17

 
674

 
—

Total
6,986

 
$
4,514

 
$
2,453

 
$
19

Investments Measured at NAV
 
 
 
 
 
 
 
Equity funds
933

 
 
 
 
 
 
Fixed income funds
323

 
 
 
 
 
 
Hedge funds
342

 
 
 
 
 
 
Private equity funds
302

 
 
 
 
 
 
Other
1

 
 
 
 
 
 
Total Investments Measured at NAV
1,901

 
 
 
 
 
 
Receivables, net
5

 
 
 
 
 
 
Total fair value of plan assets
$
8,892

 
 
 
 
 
 
 
June 28, 2019
 
Total
 
Level 1
 
Level 2
 
Level 3
 
 
 
 
 
 
 
 
 
(In millions)
Asset Category
 
 
 
 
 
 
 
Equities:
 
 
 
 
 
 
 
Domestic equities
$
1,173

 
$
1,173

 
$
—

 
$
—

International equities
896

 
896

 
—

 
—

Fixed income:
 
 
 
 
 
 
 
Corporate bonds
923

 
—

 
906

 
17

Government securities
332

 
—

 
332

 
—

Other
2

 
—

 
—

 
2

Cash and cash equivalents
59

 
12

 
47

 
—

Total
3,385

 
$
2,081

 
$
1,285

 
$
19

Investments Measured at NAV
 
 
 
 
 
 
 
Equity funds
703

 
 
 
 
 
 
Fixed income funds
362

 
 
 
 
 
 
Hedge funds
331

 
 
 
 
 
 
Private equity funds
294

 
 
 
 
 
 
Total Investments Measured at NAV
1,690

 
 
 
 
 
 
Receivables, net
84

 
 
 
 
 
 
Total fair value of plan assets
$
5,159

 
 
 
 
 
 

 
June 29, 2018
 
Total
 
Level 1
 
Level 2
 
Level 3
 
 
 
 
 
 
 
 
 
(In millions)
Asset Category
 
 
 
 
 
 
 
Equities:
 
 
 
 
 
 
 
Domestic equities
$
1,221

 
$
1,189

 
$
32

 
$
—

International equities
903

 
899

 
4

 
—

Fixed income:
 
 
 
 
 
 
 
Corporate bonds
811

 
—

 
800

 
11

Government securities
335

 
—

 
335

 
—

Other
2

 
—

 
—

 
2

Cash and cash equivalents
209

 
6

 
203

 
—

Total
3,481

 
$
2,094

 
$
1,374

 
$
13

Investments Measured at NAV
 
 
 
 
 
 
 
Equity funds
714

 
 
 
 
 
 
Fixed income funds
318

 
 
 
 
 
 
Hedge funds
395

 
 
 
 
 
 
Private equity funds
401

 
 
 
 
 
 
Total Investments Measured at NAV
1,828

 
 
 
 
 
 
Payables, net
(4
)
 
 
 
 
 
 
Total fair value of plan assets
$
5,305

 
 
 
 
 
 

The following table provides the current strategic target asset allocation ranges by asset category:
 
Target Asset
Allocation
Equity investments
40
%
—
60%
Fixed income investments
20
%
—
40%
Hedge funds
0
%
—
30%
Cash and cash equivalents
0
%
—
10%
Schedule of Expected 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 in existence as of January 3, 2020.
 
Pension
 
Other
    Benefits(1)
 
Total
 
 
 
 
 
 
 
(In millions)
Fiscal Years:
 
 
 
 
 
2020
$
572

 
$
32

 
$
604

2021
576

 
31

 
607

2022
583

 
30

 
613

2023
584

 
29

 
613

2024
581

 
27

 
608

2025 — 2028
2,896

 
117

 
3,013


_______________
(1)
Projected payments for Other Benefits reflect net payments from the Company, which include subsidies that reduce the gross payments by less than 10 percent.