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ACCOUNTING CHANGES OR RECENT ACCOUNTING PRONOUNCEMENTS (Tables) | 12 Months Ended
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Jun. 29, 2018
Accounting Changes and Error Corrections [Abstract] |
Schedule of Effect of Adopting ASC 606 and ASU 2017-07 on Condensed Consolidated Financial Statements | The following tables summarize the effect of adopting ASC 606 and ASU 2017-07 on our Consolidated Statement of Income for fiscal 2018 and 2017:
| Fiscal Year Ended June 29, 2018
| As Previously Reported |  | Effect of Adopting ASC 606 |  | Effect of Adopting ASU 2017-07 |  | As Recast
| (In millions, except per share amounts)
Revenue from product sales and services |  |  |  |  |  |  |
Revenue from product sales | $ | 5,062 |  |  | $ | (24 | ) |  | $ | — |  |  | $ | 5,038 |
Revenue from services | 1,120 |  |  | 10 |  |  | — |  |  | 1,130 |
| 6,182 |  |  | (14 | ) |  | — |  |  | 6,168 |
Cost of product sales and services |  |  |  |  |  |  |
Cost of product sales | (3,106 | ) |  | 14 |  |  | (147 | ) |  | (3,239 | )
Cost of services | (825 | ) |  | (2 | ) |  | — |  |  | (827 | )
| (3,931 | ) |  | 12 |  |  | (147 | ) |  | (4,066 | )
Engineering, selling and administrative expenses | (1,129 | ) |  | (16 | ) |  | (37 | ) |  | (1,182 | )
Non-operating income (loss) | (28 | ) |  | — |  |  | 184 |  |  | 156 |
Interest income | 2 |  |  | — |  |  | — |  |  | 2 |
Interest expense | (170 | ) |  | — |  |  | — |  |  | (170 | )
Income from continuing operations before income taxes | 926 |  |  | (18 | ) |  | — |  |  | 908 |
Income taxes | (205 | ) |  | (1 | ) |  | — |  |  | (206 | )
Income from continuing operations | 721 |  |  | (19 | ) |  | — |  |  | 702 |
Discontinued operations, net of income taxes | (3 | ) |  | — |  |  | — |  |  | (3 | )
Net income | $ | 718 |  |  | $ | (19 | ) |  | $ | — |  |  | $ | 699 |
Net income per common share |  |  |  |  |  |  |
Basic |  |  |  |  |  |  |
Continuing operations | $ | 6.06 |  |  | $ | (0.16 | ) |  | $ | — |  |  | $ | 5.90 |
Discontinued operations | (0.02 | ) |  | — |  |  | — |  |  | (0.02 | )
| $ | 6.04 |  |  | $ | (0.16 | ) |  | $ | — |  |  | $ | 5.88 |
Diluted |  |  |  |  |  |  |
Continuing operations | $ | 5.94 |  |  | $ | (0.16 | ) |  | $ | — |  |  | $ | 5.78 |
Discontinued operations | (0.02 | ) |  | — |  |  | — |  |  | (0.02 | )
| $ | 5.92 |  |  | $ | (0.16 | ) |  | $ | — |  |  | $ | 5.76 |
| Fiscal Year Ended June 29, 2017
| As Previously Reported |  | Effect of Adopting ASC 606 |  | Effect of Adopting ASU 2017-07 |  | As Recast
| (In millions, except per share amounts)
Revenue from product sales and services |  |  |  |  |  |  |
Revenue from product sales | $ | 4,667 |  |  | $ | — |  |  | $ | — |  |  | $ | 4,667 |
Revenue from services | 1,233 |  |  | (3 | ) |  | — |  |  | 1,230 |
| 5,900 |  |  | (3 | ) |  | — |  |  | 5,897 |
Cost of product sales and services |  |  |  |  |  |  |
Cost of product sales | (2,964 | ) |  | 10 |  |  | (104 | ) |  | (3,058 | )
Cost of services | (770 | ) |  | 2 |  |  | (28 | ) |  | (796 | )
| (3,734 | ) |  | 12 |  |  | (132 | ) |  | (3,854 | )
Engineering, selling and administrative expenses | (1,093 | ) |  | (25 | ) |  | (32 | ) |  | (1,150 | )
Non-operating income | 2 |  |  | — |  |  | 164 |  |  | 166 |
Interest income | 2 |  |  | — |  |  | — |  |  | 2 |
Interest expense | (172 | ) |  | — |  |  | — |  |  | (172 | )
Income from continuing operations before income taxes | 905 |  |  | (16 | ) |  | — |  |  | 889 |
Income taxes | (267 | ) |  | 6 |  |  | — |  |  | (261 | )
Income from continuing operations | 638 |  |  | (10 | ) |  | — |  |  | 628 |
Discontinued operations, net of income taxes | (85 | ) |  | — |  |  | — |  |  | (85 | )
Net income | $ | 553 |  |  | $ | (10 | ) |  | $ | — |  |  | $ | 543 |
Net income per common share |  |  |  |  |  |  |
Basic |  |  |  |  |  |  |
Continuing operations | $ | 5.19 |  |  | $ | (0.08 | ) |  | $ | — |  |  | $ | 5.11 |
Discontinued operations | (0.69 | ) |  | — |  |  | — |  |  | (0.69 | )
| $ | 4.50 |  |  | $ | (0.08 | ) |  | $ | — |  |  | $ | 4.42 |
Diluted |  |  |  |  |  |  |
Continuing operations | $ | 5.12 |  |  | $ | (0.08 | ) |  | $ | — |  |  | $ | 5.04 |
Discontinued operations | (0.68 | ) |  | — |  |  | — |  |  | (0.68 | )
| $ | 4.44 |  |  | $ | (0.08 | ) |  | $ | — |  |  | $ | 4.36 |
The following table summarizes the effect of the adoption of ASC 606 on our Consolidated Balance Sheet at June 29, 2018 and June 30, 2017:
| June 29, 2018 |  | June 30, 2017
| As Previously Reported |  | Effect of Adopting ASC 606 |  | As Recast |  | As Reported |  | Effect of adopting ASC 606 |  | As Recast
| (In millions)
Assets |  |  |  |  |  |  |  |  |  |  |
Current Assets |  |  |  |  |  |  |  |  |  |  |
Cash and cash equivalents | $ | 288 |  |  | $ | — |  |  | $ | 288 |  |  | $ | 484 |  |  | $ | — |  |  | $ | 484 |
Receivables | 735 |  |  | (269 | ) |  | 466 |  |  | 623 |  |  | (258 | ) |  | 365 |
Contract assets | — |  |  | 782 |  |  | 782 |  |  | — |  |  | 706 |  |  | 706 |
Inventories | 925 |  |  | (514 | ) |  | 411 |  |  | 841 |  |  | (449 | ) |  | 392 |
Income taxes receivable | 174 |  |  | — |  |  | 174 |  |  | 24 |  |  | — |  |  | 24 |
Other current assets | 101 |  |  | 2 |  |  | 103 |  |  | 101 |  |  | — |  |  | 101 |
Total current assets | 2,223 |  |  | 1 |  |  | 2,224 |  |  | 2,073 |  |  | (1 | ) |  | 2,072 |
Non-current Assets |  |  |  |  |  |  |  |  |  |  |
Property, plant and equipment | 900 |  |  | — |  |  | 900 |  |  | 904 |  |  | — |  |  | 904 |
Goodwill | 5,372 |  |  | — |  |  | 5,372 |  |  | 5,366 |  |  | — |  |  | 5,366 |
Other intangible assets | 989 |  |  | — |  |  | 989 |  |  | 1,104 |  |  | — |  |  | 1,104 |
Non-current deferred income taxes | 116 |  |  | 3 |  |  | 119 |  |  | 409 |  |  | 15 |  |  | 424 |
Other non-current assets | 239 |  |  | 8 |  |  | 247 |  |  | 234 |  |  | 8 |  |  | 242 |
Total non-current assets | 7,616 |  |  | 11 |  |  | 7,627 |  |  | 8,017 |  |  | 23 |  |  | 8,040 |
| $ | 9,839 |  |  | $ | 12 |  |  | $ | 9,851 |  |  | $ | 10,090 |  |  | $ | 22 |  |  | $ | 10,112 |
Liabilities and Equity |  |  |  |  |  |  |  |  |  |  |
Current Liabilities |  |  |  |  |  |  |  |  |  |  |
Short-term debt | $ | 78 |  |  | $ | — |  |  | $ | 78 |  |  | $ | 80 |  |  | $ | — |  |  | $ | 80 |
Accounts payable | 622 |  |  | — |  |  | 622 |  |  | 540 |  |  | — |  |  | 540 |
Advanced payments and unearned income | 314 |  |  | (314 | ) |  | — |  |  | 252 |  |  | (252 | ) |  | — |
Contract liabilities | — |  |  | 372 |  |  | 372 |  |  | — |  |  | 291 |  |  | 291 |
Compensation and benefits | 142 |  |  | — |  |  | 142 |  |  | 140 |  |  | — |  |  | 140 |
Other accrued items | 313 |  |  | 4 |  |  | 317 |  |  | 329 |  |  | 3 |  |  | 332 |
Income taxes payable | 15 |  |  | — |  |  | 15 |  |  | 31 |  |  | (1 | ) |  | 30 |
Current portion of long-term debt, net | 304 |  |  | — |  |  | 304 |  |  | 554 |  |  | — |  |  | 554 |
Total current liabilities | 1,788 |  |  | 62 |  |  | 1,850 |  |  | 1,926 |  |  | 41 |  |  | 1,967 |
Non-current Liabilities |  |  |  |  |  |  |  |  |  |  |
Defined benefit plans | 714 |  |  | — |  |  | 714 |  |  | 1,278 |  |  | — |  |  | 1,278 |
Long-term debt, net | 3,408 |  |  | — |  |  | 3,408 |  |  | 3,396 |  |  | — |  |  | 3,396 |
Non-current deferred income taxes | 90 |  |  | (11 | ) |  | 79 |  |  | 34 |  |  | — |  |  | 34 |
Other long-term liabilities | 517 |  |  | 5 |  |  | 522 |  |  | 528 |  |  | 6 |  |  | 534 |
Total non-current liabilities | 4,729 |  |  | (6 | ) |  | 4,723 |  |  | 5,236 |  |  | 6 |  |  | 5,242 |
Equity |  |  |  |  |  |  |  |  |  |  |
Shareholders’ Equity: |  |  |  |  |  |  |  |  |  |  |
Common stock | 118 |  |  | — |  |  | 118 |  |  | 120 |  |  | — |  |  | 120 |
Other capital | 1,714 |  |  | — |  |  | 1,714 |  |  | 1,741 |  |  | — |  |  | 1,741 |
Retained earnings | 1,692 |  |  | (44 | ) |  | 1,648 |  |  | 1,343 |  |  | (25 | ) |  | 1,318 |
Accumulated other comprehensive loss | (202 | ) |  | — |  |  | (202 | ) |  | (276 | ) |  | — |  |  | (276 | )
Total equity | 3,322 |  |  | (44 | ) |  | 3,278 |  |  | 2,928 |  |  | (25 | ) |  | 2,903 |
| $ | 9,839 |  |  | $ | 12 |  |  | $ | 9,851 |  |  | $ | 10,090 |  |  | $ | 22 |  |  | $ | 10,112 |
The following table presents the effect of the adoption of ASC 606 on our Consolidated Statement of Cash Flows for fiscal 2018 and 2017:
| Fiscal Year Ended
| June 29, 2018 |  | June 30, 2017
| As Previously Reported |  | Effect of Adopting ASC 606 |  | As Recast |  | As Reported |  | Effect of Adopting ASC 606 |  | As Recast
| (In millions)
Net income | $ | 718 |  |  | (19 | ) |  | $ | 699 |  |  | $ | 553 |  |  | $ | (10 | ) |  | $ | 543 |
Adjustments to reconcile net income to net cash provided by operating activities: |  |  |  |  |  |  |  |  |  |  |
Amortization of acquisition-related intangibles(1) | 117 |  |  | — |  |  | 117 |  |  | 151 |  |  | — |  |  | 151 |
Depreciation and other amortization(1) | 142 |  |  | — |  |  | 142 |  |  | 160 |  |  | — |  |  | 160 |
Share-based compensation | 82 |  |  | — |  |  | 82 |  |  | 42 |  |  | — |  |  | 42 |
Qualified pension plan contributions | (301 | ) |  | — |  |  | (301 | ) |  | (589 | ) |  | — |  |  | (589 | )
Pension income | (135 | ) |  | — |  |  | (135 | ) |  | (97 | ) |  | — |  |  | (97 | )
Impairment of goodwill and other assets | — |  |  | — |  |  | — |  |  | 240 |  |  | — |  |  | 240 |
Loss on sales of businesses, net | — |  |  | — |  |  | — |  |  | 14 |  |  | — |  |  | 14 |
Loss on extinguishment of debt | 24 |  |  | — |  |  | 24 |  |  | — |  |  | — |  |  | — |
(Increase) decrease in: |  |  |  |  |  |  |  |  |  |  |
Accounts receivable | (112 | ) |  | 11 |  |  | (101 | ) |  | 111 |  |  | (87 | ) |  | 24 |
Contract assets | — |  |  | (76 | ) |  | (76 | ) |  | — |  |  | 156 |  |  | 156 |
Inventories | (84 | ) |  | 65 |  |  | (19 | ) |  | 28 |  |  | (60 | ) |  | (32 | )
Increase (decrease) in: |  |  |  |  |  |  |  |  |  |  |
Accounts payable | 82 |  |  | — |  |  | 82 |  |  | 18 |  |  | — |  |  | 18 |
Advanced payments and unearned income | 63 |  |  | (63 | ) |  | — |  |  | (42 | ) |  | 42 |  |  | — |
Contract liabilities | — |  |  | 81 |  |  | 81 |  |  | — |  |  | (31 | ) |  | (31 | )
Income taxes | 202 |  |  | — |  |  | 202 |  |  | 131 |  |  | (20 | ) |  | 111 |
Other | (47 | ) |  | 1 |  |  | (46 | ) |  | (151 | ) |  | 10 |  |  | (141 | )
Net cash provided by operating activities | $ | 751 |  |  | $ | — |  |  | $ | 751 |  |  | $ | 569 |  |  | $ | — |  |  | $ | 569 |
_______________
(1) | “Amortization of acquisition-related intangibles” includes amortization of non-Exelis Inc. acquisition-related intangibles, which was previously included in the “Depreciation and amortization” line item in our Consolidated Statement of Cash Flows in our fiscal Fiscal 2018 Annual Report on Form 10-K.

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