Supplemental Financial Statement Data

3 Months Ended

Sep. 30, 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 three months ended September 30, 2022, the Company sold trade accounts receivable aggregating $291 million. The Company did not sell any trade accounts receivable during the three months ended October 1, 2021. The discounts on the trade accounts receivable sold were not material and were recorded within Other income (expense), net in the Condensed Consolidated Statements of Operations. As of September 30, 2022 and July 1, 2022, the amount of factored receivables that remained outstanding was $291 million and $300 million, respectively.

Inventories


	September 30, 2022		July 1, 2022
	(in millions)
Inventories:
Raw materials and component parts	$	1,809	$	1,603
Work-in-process	1,130		1,162
Finished goods	923		873
Total inventories	$	3,862	$	3,638

Property, plant and equipment, net


	September 30, 2022		July 1, 2022
	(in millions)
Property, plant and equipment:
Land	$	269	$	269
Buildings and improvements	1,945		1,920
Machinery and equipment	8,734		8,642
Computer equipment and software	499		494
Furniture and fixtures	54		54
Construction-in-process	642		591
Property, plant and equipment, gross	12,143		11,970
Accumulated depreciation	(8,425)		(8,300)
Property, plant and equipment, net	$	3,718	$	3,670

Other Intangible assets


	September 30, 2022		July 1, 2022
	(in millions)
Other Intangible assets:
Finite-lived intangible assets	$	5,715	$	5,493
In-process research and development	80		80
Accumulated amortization	(5,621)		(5,360)
Other Intangible assets, net	$	174	$	213

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
	September 30, 2022		October 1, 2021
	(in millions)
Warranty accrual, beginning of period	$	345	$	363

Charges to operations	32		40
Utilization	(34)		(23)
Changes in estimate related to pre-existing warranties	(3)		(10)
Warranty accrual, end of period	$	340	$	370

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:


	September 30, 2022		July 1, 2022
	(in millions)
Warranty accrual:
Current portion (included in Accrued expenses)	$	144	$	162
Long-term portion (included in Other liabilities)	196		183
Total warranty accrual	$	340	$	345

Other liabilities


	September 30, 2022		July 1, 2022
	(in millions)
Other liabilities:
Non-current net tax payable	$	460	$	659
Non-current portion of unrecognized tax benefits	453		477
Other non-current liabilities	629		643
Total other liabilities	$	1,542	$	1,779

Accumulated other comprehensive loss

Accumulated other comprehensive 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 Losses		Foreign Currency Translation Adjustment		Unrealized Losses on Derivative Contracts		Total Accumulated Comprehensive Loss
	(in millions)















Balance at July 1, 2022	$	(11)	$	(277)	$	(266)	$	(554)
Other comprehensive loss before reclassifications	—		(80)		(140)		(220)
Amounts reclassified from accumulated other comprehensive loss	—		—		64		64
Income tax benefit related to items of other comprehensive loss	—		—		16		16
Net current-period other comprehensive loss	—		(80)		(60)		(140)
Balance at September 30, 2022	$	(11)	$	(357)	$	(326)	$	(694)

During the three months ended September 30, 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 $62 million for the three months ended September 30, 2022 that 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 $2 million for the three months ended September 30, 2022 that were charged to Interest expense in the Condensed Consolidated Statements of Operations.

As of September 30, 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 September 30, 2022, the Company did not have any foreign exchange forward contracts with credit-risk-related contingent features.