INCOME TAXES (Tables)

6 Months Ended

Jan. 03, 2020

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



	Two Quarters Ended			Fiscal Years Ended
	January 3, 2020			June 28, 2019			June 29, 2018			June 30, 2017

	(In millions)
Current:
United States	$	11		$	105		$	(141	)	$	117
International	37			9			12			9
State and local	16			8			(11		)	6
	64			122			(140		)	132
Deferred:
United States	33			15			324			121
International	(15		)	(3		)	(3		)	1
State and local	(9		)	26			25			7
	9			38			346			129
	$	73		$	160		$	206		$	261

Schedule of Provision for Income Taxes

The total income tax provision is summarized as follows:



	Two Quarters Ended		Fiscal Years Ended
	January 3, 2020		June 28, 2019			June 29, 2018			June 30, 2017

	(In millions)
Continuing operations	$	73	$	160		$	206		$	261
Discontinued operations	—		(1		)	(5		)	(110		)
Total income tax provision	$	73	$	159		$	201		$	151

Schedule of Reconciliation of United States Statutory Income Tax Rate To Our Effective Income Tax Rate [Table Text Block]

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



	Two Quarters Ended		Fiscal Years Ended
	January 3, 2020		June 28, 2019		June 29, 2018		June 30, 2017
U.S. statutory income tax rate	21.0	%	21.0	%	28.1	%	35.0	%
State taxes	1.4		2.4		1.9		1.0
International income	0.9		(0.5	)	(0.5	)	(1.3	)
Research and development tax credit	(4.7	)	(4.5	)	(2.9	)	(2.0	)
Foreign derived intangibles income deduction	(0.8	)	(1.3	)	—		—
Change in valuation allowance	(4.8	)	(1.8	)	0.2		(0.2	)
U.S. production activity benefit	—		—		(0.9	)	(0.5	)
Equity-based compensation⁽¹⁾	(5.4	)	(2.1	)	(1.8	)	(2.6	)
Settlement of tax audits	—		—		(2.2	)	—
U.S. tax reform	—		—		0.4		—
Other items	0.4		1.2		0.4		(0.1	)
Effective income tax rate	8.0	%	14.4	%	22.7	%	29.3	%

_______________

(1)

Includes non-deductible equity-based compensation and excess tax benefits from equity-based compensation

Schedule of Components of Deferred Income Tax Assets Liabilities

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



	January 3, 2020			June 28, 2019			June 29, 2018

	(In millions)
Deferred tax assets:
Accruals	$	240		$	152		$	178
Tax loss and credit carryforwards	177			92			119
Share-based compensation	27			28			26
Capital loss carryforwards	44			95			101
Pension and other post-employment benefits	431			305			188
Operating lease obligation	213			—			—
Other	238			75			64
Valuation allowance⁽¹⁾	(185		)	(159		)	(181		)
Deferred tax assets, net	1,185			588			495

Deferred tax liabilities:
Property, plant and equipment	(159		)	(71		)	(65		)
Unbilled receivables	(51		)	(65		)	(86		)
Acquired intangibles	(2,037		)	(260		)	(268		)
Operating lease right-of-use asset	(196		)	—			—
Other	(121		)	(31		)	(36		)
Deferred tax liabilities	(2,564		)	(427		)	(455		)
Net deferred tax assets (liabilities)	$	(1,379	)	$	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

Net deferred tax assets (liabilities) were classified as follows in our Consolidated Balance Sheet:



	January 3, 2020			June 28, 2019			June 29, 2018

	(In millions)
Non-current deferred income tax assets	$	102		$	173		$	119
Non-current deferred income tax liabilities	(1,481		)	(12		)	(79		)
	$	(1,379	)	$	161		$	40

Schedule of Reconciliation of Unrecognized Tax Benefits

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



	Two Quarters Ended			Fiscal Years Ended
	January 3, 2020			June 28, 2019			June 29, 2018			June 30, 2017

	(In millions)
Balance at beginning of period	$	204		$	102		$	90		$	63
Additions based on tax positions taken during current period	35			31			17			52
Additions based on tax positions taken during prior periods	—			80			23			—
Additions for tax positions related to acquired entities	226			—			—			—
Decreases based on tax positions taken during prior periods	(7		)	(9		)	(28		)	(25		)
Decreases from lapse in statutes of limitations	(20		)	—			—			—
Balance at end of period	$	438		$	204		$	102		$	90