Supplemental Financial Statement Data

9 Months Ended

Mar. 31, 2023

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 March 31, 2023 and April 1, 2022, the Company sold trade accounts receivable aggregating $626 million and $100 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 March 31, 2023 and July 1, 2022, the amount of factored receivables that remained outstanding was $235 million and $300 million, respectively.

Inventories


	March 31, 2023		July 1, 2022
	(in millions)
Inventories:
Raw materials and component parts	$	2,204	$	1,603
Work-in-process	1,025		1,162
Finished goods	750		873
Total inventories	$	3,979	$	3,638

Property, plant and equipment, net


	March 31, 2023		July 1, 2022
	(in millions)
Property, plant and equipment:
Land	$	269	$	269
Buildings and improvements	1,957		1,920
Machinery and equipment	8,716		8,642
Computer equipment and software	510		494
Furniture and fixtures	55		54
Construction-in-process	756		591
Property, plant and equipment, gross	12,263		11,970
Accumulated depreciation	(8,595)		(8,300)
Property, plant and equipment, net	$	3,668	$	3,670

Other Intangible assets, net


	March 31, 2023		July 1, 2022
	(in millions)
Other Intangible assets:
Finite-lived intangible assets	$	5,493	$	5,493
In-process research and development	80		80
Accumulated amortization	(5,476)		(5,360)
Other Intangible assets, net	$	97	$	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				Nine Months Ended
	March 31, 2023		April 1, 2022		March 31, 2023		April 1, 2022
	(in millions)
Warranty accrual, beginning of period	$	289	$	351	$	345	$	363

Charges to operations	26		35		83		111
Utilization	(43)		(20)		(137)		(71)
Changes in estimate related to pre-existing warranties	—		(11)		(19)		(48)
Warranty accrual, end of period	$	272	$	355	$	272	$	355

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:


	March 31, 2023		July 1, 2022
	(in millions)
Warranty accrual:
Current portion (included in Accrued expenses)	$	117	$	162
Long-term portion (included in Other liabilities)	155		183
Total warranty accrual	$	272	$	345

Other liabilities


	March 31, 2023		July 1, 2022
	(in millions)
Other liabilities:
Non-current net tax payable	$	462	$	659
Non-current portion of unrecognized tax benefits	439		477
Other non-current liabilities	604		643
Total other liabilities	$	1,505	$	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 income before reclassifications	(1)		8		(17)		(10)
Amounts reclassified from accumulated other comprehensive loss	—		—		250		250
Income tax benefit related to items of other comprehensive loss	—		1		(49)		(48)
Net current-period other comprehensive income	(1)		9		184		192
Balance at March 31, 2023	$	(12)	$	(268)	$	(82)	$	(362)

During the three and nine months ended March 31, 2023, the amounts reclassified out of AOCI were losses related to foreign exchange contracts and gains related to interest rate swap contracts. Losses reclassified out of AOCI related to foreign exchange contracts were $79 million and $260 million for the three and nine months ended March 31, 2023, respectively, that were substantially charged to Cost of revenue in the Condensed Consolidated Statements of Operations. Gains reclassified out of AOCI related to interest rate swap contracts were $6 million and $10 million for the three and nine months ended March 31, 2023, respectively, that were charged to Interest expense in the Condensed Consolidated Statements of Operations.

As of March 31, 2023, substantially all 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 March 31, 2023, the Company did not have any foreign exchange forward contracts with credit-risk-related contingent features.