XML 38 R9.htm IDEA: XBRL DOCUMENT
v3.8.0.1

Supplemental Financial Statement Data | 6 Months Ended
--- | ---
Dec. 29, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract] |
Supplemental Financial Statement Data | Supplemental Financial Statement Data Inventories
| December 29, 2017 |  | June 30, 2017
| (in millions)
Inventories: |  |  |
Raw materials and component parts | $ | 634 |  |  | $ | 646 |
Work-in-process | 667 |  |  | 632 |
Finished goods | 980 |  |  | 1,063 |
Total inventories | $ | 2,281 |  |  | $ | 2,341 |
Property, plant and equipment, net
| December 29, 2017 |  | June 30, 2017
| (in millions)
Property, plant, and equipment: |  |  |
Land and buildings | $ | 1,913 |  |  | $ | 1,855 |
Machinery and equipment | 7,011 |  |  | 6,815 |
Computer equipment and software | 433 |  |  | 404 |
Furniture and fixtures | 50 |  |  | 49 |
Leasehold improvements | 253 |  |  | 259 |
Construction-in-process | 175 |  |  | 144 |
Property, plant and equipment, gross | 9,835 |  |  | 9,526 |
Accumulated depreciation | (6,781 | ) |  | (6,493 | )
Property, plant, and equipment, net | $ | 3,054 |  |  | $ | 3,033 |
Goodwill
| Carrying Amount
| (in millions)
Balance at June 30, 2017 | $ | 10,014 |
Goodwill recorded in connection with acquisitions | 61 |
Foreign currency translation adjustment | 1 |
Balance at December 29, 2017 | $ | 10,076 |
On September 15, 2017, the Company acquired substantially all the assets of Tegile Systems, Inc., a provider of flash and persistent-memory storage solutions for enterprise data center applications. On August 25, 2017, the Company acquired substantially all the assets of Upthere, Inc., a cloud services company. These acquisitions are primarily intended to help meet the evolving needs of customers, while driving long-term growth for the Company's existing data center and client solution products over the long term. The aggregate purchase price of acquisitions during the six months ended December 29, 2017 was $99 million in cash, with net assets acquired primarily consisting of developed technology and other intangibles assets, of which $61 million was allocated to goodwill. Goodwill is primarily attributable to the benefits the Company expects to derive from diversifying product offerings to its Data Center Devices and Solutions and Client Solutions end markets as well as the acquired workforce. Goodwill is expected to be deductible for tax purposes because the acquisitions were structured as asset acquisitions but accounted for as business combinations. Concurrent with these acquisitions, the Company received $36 million in proceeds on previously outstanding notes receivable due from these acquired entities. During the six months ended December 29, 2017, the Company incurred $6 million of transaction expenses related to these acquisitions, which are primarily included within Selling, General and Administrative expenses in the Condensed Consolidated Statements of Operations. Revenues and earnings related to these acquisitions was not material. Intangible assets
| December 29, 2017 |  | June 30, 2017
| (in millions)
Finite-lived intangible assets | $ | 5,814 |  |  | $ | 5,160 |
In-process research and development | 80 |  |  | 696 |
Accumulated amortization | (2,664 | ) |  | (2,033 | )
Intangible assets, net | $ | 3,230 |  |  | $ | 3,823 |
As part of prior acquisitions, the Company recorded at the time of the acquisition acquired in-process research and development (“IPR&D”) for projects in progress that had not yet reached technological feasibility. IPR&D is initially accounted for as an indefinite-lived intangible asset. Once a project reaches technological feasibility, the Company reclassifies the balance to existing technology and begins to amortize the intangible asset over its estimated useful life. During the three months ended December 29, 2017, two IPR&D projects reached technological feasibility totaling $616 million and commenced amortization over an estimated useful life of 4 years. Product warranty liability Changes in the warranty accrual were as follows:
| Three Months Ended |  | Six Months Ended
| December 29, 2017 |  | December 30, 2016 |  | December 29, 2017 |  | December 30, 2016
| (in millions)
Warranty accrual, beginning of period | $ | 302 |  |  | $ | 277 |  |  | $ | 311 |  |  | $ | 279 |
Charges to operations | 46 |  |  | 44 |  |  | 90 |  |  | 91 |
Utilization | (43 | ) |  | (35 | ) |  | (81 | ) |  | (80 | )
Changes in estimate related to pre-existing warranties | (1 | ) |  | 27 |  |  | (16 | ) |  | 23 |
Warranty accrual, end of period | $ | 304 |  |  | $ | 313 |  |  | $ | 304 |  |  | $ | 313 |
The long-term portion of the warranty accrual classified in Other liabilities was $110 million and $125 million as of December 29, 2017 and June 30, 2017, respectively. Other liabilities
| December 29, 2017 |  | June 30, 2017
| (in millions)
Non-current income taxes payable | $ | 1,425 |  |  | $ | — |
Other non-current liabilities | 1,013 |  |  | 1,180 |
Total other non-current liabilities | $ | 2,438 |  |  | $ | 1,180 |
Accumulated other comprehensive income (loss) Other comprehensive loss (“OCI”), net of tax refers to expenses, gains and losses that are recorded as an element of shareholders’ equity but are excluded from net income. The following table illustrates the changes in the balances of each component of Accumulated other comprehensive income (loss) (“AOCI”):
| Actuarial Pension Gains (Losses) |  | Foreign Currency Translation Gains (Losses) |  | Unrealized Gains (Losses) on Available for Sale Securities |  | Unrealized Gains (Losses) on Derivative Contracts |  | Total Accumulated Comprehensive Income (Loss)
| (in millions)
Balance at June 30, 2017 | $ | (18 | ) |  | $ | (39 | ) |  | $ | 2 |  |  | $ | (3 | ) |  | $ | (58 | )
Other comprehensive income (loss) before reclassifications | — |  |  | 2 |  |  | (1 | ) |  | 15 |  |  | 16 |
Amounts reclassified from accumulated other comprehensive income | — |  |  | — |  |  | — |  |  | (1 | ) |  | (1 | )
Income tax expense related to items of other comprehensive income | — |  |  | — |  |  | — |  |  | (3 | ) |  | (3 | )
Net current-period other comprehensive income | — |  |  | 2 |  |  | (1 | ) |  | 11 |  |  | 12 |
Balance at December 29, 2017 | $ | (18 | ) |  | $ | (37 | ) |  | $ | 1 |  |  | $ | 8 |  |  | $ | (46 | )
During the three and six months ended December 29, 2017, there were no material reclassifications out of AOCI. The following table illustrates the significant amounts of each component reclassified out of AOCI to the Condensed Consolidated Statements of Operations:
|  | Three Months Ended |  | Six Months Ended |  |
AOCI Component |  | December 29, 2017 |  | December 30, 2016 |  | December 29, 2017 |  | December 30, 2016 |  | Statement of Operations Line Item
|  | (in millions) |  |
Unrealized holding gain (loss) on designated hedging activities: |  |  |  |  |  |  |  |  |  |
Foreign exchange contracts |  | $ | 4 |  |  | $ | 16 |  |  | $ | 1 |  |  | $ | 40 |  |  | Cost of revenue
Foreign exchange contracts |  | — |  |  | — |  |  | — |  |  | 2 |  |  | Research and development
Unrealized holding gain on designated hedging activities |  | 4 |  |  | 16 |  |  | 1 |  |  | 42 |  |  |
Total reclassifications for the period |  | $ | 4 |  |  | $ | 16 |  |  | $ | 1 |  |  | $ | 42 |  |  |

X
- References No definition available. + Details
Name: | us-gaap_OrganizationConsolidationAndPresentationOfFinancialStatementsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for supplemental balance sheet disclosures, including descriptions and amounts for assets, liabilities, and equity. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -URI http://asc.fasb.org/topic&trid=2122208 + Details
Name: | us-gaap_SupplementalBalanceSheetDisclosuresTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration