Supplemental Financial Statement Data

Accounts receivable, net

From time to time, in connection with factoring agreements, the Company sells trade accounts receivable without recourse to third party purchasers in exchange for cash. During the six months ended December 28, 2018, the Company sold trade accounts receivable and received cash proceeds of $370 million. The discounts on the trade accounts receivable sold during the period were not material and were recorded within Other income (expense), net in the Condensed Consolidated Financial Statements. During the six months ended December 29, 2017, the Company did not sell any trade accounts receivable.

Inventories



	December 28, 2018		June 29, 2018
	(in millions)
Inventories:
Raw materials and component parts	$	1,191	$	1,048
Work-in-process	864		878
Finished goods	1,372		1,018
Total inventories	$	3,427	$	2,944

Property, plant and equipment, net



	December 28, 2018			June 29, 2018
	(in millions)
Property, plant, and equipment:
Land	$	307		$	306
Buildings and improvements	1,975			1,949
Machinery and equipment	7,493			7,209
Computer equipment and software	450			440
Furniture and fixtures	54			48
Construction-in-process	238			234
Property, plant and equipment, gross	10,517			10,186
Accumulated depreciation	(7,440		)	(7,091		)
Property, plant, and equipment, net	$	3,077		$	3,095

Goodwill



	Carrying Amount
	(in millions)
Balance at June 29, 2018	$	10,075
Foreign currency translation adjustment	(1		)
Balance at December 28, 2018	$	10,074

The Company tests for impairment, at a minimum, on an annual basis or earlier where certain events or changes in circumstances indicate that goodwill may more-likely-than-not be impaired. The Company has experienced declines in the market price of its stock, resulting in the Company’s market capitalization decreasing below book value for the last seven trading days of the second quarter of fiscal 2019. The Company’s market capitalization based upon its stock price has fluctuated above and below book value subsequent to the end of the quarter. The fair value of the Company using a market capitalization approach based on the Company’s share price would include a control premium based on recent transactions that have occurred in the technology industry. This indicative fair value exceeded the Company’s book value; therefore, management does not believe it is more likely than not that goodwill was impaired as of December 28, 2018.

If there are further decreases in the Company’s stock price for a sustained period or other unfavorable factors, the Company may be required to perform a goodwill impairment assessment, which may result in a recognition of goodwill impairment that could be material to the Consolidated Financial Statements.

Intangible assets



	December 28, 2018			June 29, 2018
	(in millions)
Finite-lived intangible assets	$	5,816		$	5,818
In-process research and development	80			80
Accumulated amortization	(3,748		)	(3,218		)
Intangible assets, net	$	2,148		$	2,680

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.

Product warranty liability

Changes in the warranty accrual were as follows:



	Three Months Ended						Six Months Ended
	December 28, 2018			December 29, 2017			December 28, 2018			December 29, 2017
	(in millions)
Warranty accrual, beginning of period	$	323		$	302		$	318		$	311
Charges to operations	47			46			81			90
Utilization	(42		)	(43		)	(68		)	(81		)
Changes in estimate related to pre-existing warranties	9			(1		)	6			(16		)
Warranty accrual, end of period	$	337		$	304		$	337		$	304

The current portion of the warranty accrual is classified in Accrued expenses and the long-term portion is classified in Other liabilities as noted below:



	December 28, 2018		June 29, 2018
	(in millions)
Warranty accrual
Current portion	$	183	$	168
Long-term portion	154		150
Total warranty accrual	$	337	$	318

Other liabilities



	December 28, 2018		June 29, 2018
	(in millions)
Other non-current liabilities:
Non-current net tax payable	$	1,018	$	1,315
Other non-current liabilities	1,289		940
Total other non-current liabilities	$	2,307	$	2,255

Accumulated other comprehensive income (loss)

Other comprehensive income (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 Adjustment			Unrealized Gains (Losses) on Derivative Contracts			Total Accumulated Comprehensive Income (Loss)
	(in millions)
Balance at June 29, 2018	$	(19	)	$	(21	)	$	1		$	(39	)
Other comprehensive income (loss) before reclassifications	1			(6		)	(5		)	(10		)
Amounts reclassified from accumulated other comprehensive income	—			—			11			11
Income tax benefit related to items of other comprehensive loss	—			(1		)	4			3
Net current-period other comprehensive loss	1			(7		)	10			4
Balance at December 28, 2018	$	(18	)	$	(28	)	$	11		$	(35	)

During the three and six months ended December 28, 2018 and December 29, 2017, the amounts reclassified out of AOCI related to derivative contracts were not material and substantially all were charged to Cost of revenue in the Condensed Consolidated Statements of Operations.