Supplemental Financial Statement Data

9 Months Ended

Apr. 01, 2022

Organization, Consolidation and Presentation of Financial Statements [Abstract]

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 nine months ended April 1, 2022 and April 2, 2021, the Company sold trade accounts receivable and received cash proceeds of $100 million and $233 million, respectively. The discounts on the trade accounts receivable sold were not material and were recorded within Other income, net in the Condensed Consolidated Statements of Operations. As of April 1, 2022 and July 2, 2021, the amount of factored receivables that remained outstanding was $100 million and $0, respectively.

Inventories


	April 1, 2022		July 2, 2021
	(in millions)
Inventories:
Raw materials and component parts	$	1,662	$	1,623
Work-in-process	1,028		1,088
Finished goods	971		905
Total inventories	$	3,661	$	3,616

Property, plant and equipment, net


	April 1, 2022		July 2, 2021
	(in millions)
Property, plant and equipment:
Land	$	272	$	278
Buildings and improvements	1,898		1,854
Machinery and equipment	8,438		7,860
Computer equipment and software	479		440
Furniture and fixtures	54		51
Construction-in-process	566		476
Property, plant and equipment, gross	11,707		10,959
Accumulated depreciation	(8,219)		(7,771)
Property, plant and equipment, net	$	3,488	$	3,188

Intangible assets


	April 1, 2022		July 2, 2021
	(in millions)
Finite-lived intangible assets	$	5,495	$	5,508
In-process research and development	80		80
Accumulated amortization	(5,323)		(5,146)
Intangible assets, net	$	252	$	442

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				Nine Months Ended
	April 1, 2022		April 2, 2021		April 1, 2022		April 2, 2021
	(in millions)
Warranty accrual, beginning of period	$	351	$	366	$	363	$	408

Charges to operations	35		27		111		86
Utilization	(20)		(27)		(71)		(82)
Changes in estimate related to pre-existing warranties	(11)		(9)		(48)		(55)
Warranty accrual, end of period	$	355	$	357	$	355	$	357

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:


	April 1, 2022		July 2, 2021
	(in millions)
Warranty accrual:
Current portion (included in Accrued expenses)	$	167	$	175
Long-term portion (included in Other liabilities)	188		188
Total warranty accrual	$	355	$	363

Other liabilities


	April 1, 2022		July 2, 2021
	(in millions)
Other liabilities:
Non-current net tax payable	$	547	$	684
Payables related to unrecognized tax benefits	996		750
Other non-current liabilities	688		633
Total other liabilities	$	2,231	$	2,067

Accumulated other comprehensive income (loss)

Accumulated other comprehensive income (loss) (“AOCI”), 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 AOCI:


	Actuarial Pension Gains (Losses)		Foreign Currency Translation Adjustment		Unrealized Gains (Losses) on Derivative Contracts		Total Accumulated Comprehensive Income (Loss)
	(in millions)















Balance at July 2, 2021	$	(35)	$	(38)	$	(124)	$	(197)
Other comprehensive income (loss) before reclassifications	2		(123)		(172)		(293)
Amounts reclassified from accumulated other comprehensive income (loss)	—		—		121		121
Income tax benefit related to items of other comprehensive income (loss)	—		—		12		12
Net current-period other comprehensive income (loss)	2		(123)		(39)		(160)
Balance at April 1, 2022	$	(33)	$	(161)	$	(163)	$	(357)

During the three and nine months ended April 1, 2022, the amounts reclassified out of AOCI were losses related to foreign exchange contracts and interest rate swap contracts. Losses reclassified out of AOCI related to foreign exchange contracts were $14 million and $83 million, for the three and nine months ended April 1, 2022, respectively, and were substantially charged to Cost of revenue in the Condensed Consolidated Statements of Operations. Losses reclassified out of AOCI related to interest rate swap contracts were $13 million and $38 million, for the three and nine months ended April 1, 2022, respectively, and were charged to Interest expense in the Condensed Consolidated Statements of Operations.

As of April 1, 2022, substantially all of existing net losses related to cash flow hedges recorded in AOCI are expected to be reclassified to earnings within the next twelve months. In addition, as of April 1, 2022, the Company did not have any foreign exchange forward contracts with credit-risk-related contingent features.