Balance Sheet Information

Investments

The following table summarizes, by major type, the fair value and amortized cost of the Company's investments as of June 30, 2017:



(Dollars in millions)	Amortized Cost		Unrealized Gain/(Loss)		Fair Value
Available-for-sale securities:
Money market funds	$	594	$	—	$	594
Time deposits and certificates of deposit	584		—		584
Total	$	1,178	$	—	$	1,178

Included in Cash and cash equivalents					$	1,174
Included in Other current assets					4
Total					$	1,178

As of June 30, 2017, the Company's Other current assets included $4 million in restricted cash and investments held as collateral at banks for various performance obligations.

As of June 30, 2017, the Company had no material available-for-sale securities that had been in a continuous unrealized loss position for a period greater than 12 months. The Company determined no available-for-sale securities were other-than-temporarily impaired as of June 30, 2017.

The fair value and amortized cost of the Company's investments classified as available-for-sale at June 30, 2017 by remaining contractual maturity was as follows:



(Dollars in millions)	Amortized Cost		Fair Value
Due in less than 1 year	$	1,178	$	1,178
Due in 1 to 5 years	—		—
Due in 6 to 10 years	—		—
Thereafter	—		—
Total	$	1,178	$	1,178

Equity securities which do not have a contractual maturity date are not included in the above table.

The Company reclassified demand deposits from certificates of deposit and money market funds to cash as of July 1, 2016 in the table below to conform to the current year's presentation. This reclassification did not result in any change to the cash and cash equivalents balance as reported in the Consolidated Balance Sheets and Statements of Cash Flows for all periods presented.

The following table summarizes, by major type, the fair value and amortized cost of the Company's investments as of July 1, 2016:



(Dollars in millions)	Amortized Cost		Unrealized Gain/(Loss)		Fair Value
Available-for-sale securities:
Money market funds	$	232	$	—	$	232
Corporate bonds	6		—		6
Certificates of deposit	5		—		5
Total	$	243	$	—	$	243

Included in Cash and cash equivalents					$	230
Included in Short-term investments					6
Included in Other current assets					7
Total					$	243

As of July 1, 2016, the Company's Other current assets included $7 million in restricted cash and investments held as collateral at banks for various performance obligations.

As of July 1, 2016, the Company had no available-for-sale securities that had been in a continuous unrealized loss position for a period greater than 12 months. The Company determined no available-for-sale securities were other-than-temporarily impaired as of July 1, 2016.

Cash, Cash Equivalents, and Restricted Cash

The following table provides a summary of cash, cash equivalents, and restricted cash reported within the Consolidated Balance Sheets that reconciles to the corresponding amount in the Consolidated Statements of Cash Flows:



(Dollars in millions)	June 30, 2017		July 1, 2016		July 3, 2015		June 27, 2014
Cash and cash equivalents	$	2,539	$	1,125	$	2,479	$	2,634
Restricted cash included in Other current assets	4		7		7		4
Total cash, cash equivalents, and restricted cash shown in the Statements of Cash Flows	$	2,543	$	1,132	$	2,486	$	2,638

Accounts Receivable, net

The following table provides details of the accounts receivable, net balance sheet item:



(Dollars in millions)	June 30, 2017			July 1, 2016
Accounts receivable	$	1,204		$	1,327
Allowance for doubtful accounts	(5		)	(9		)
	$	1,199		$	1,318

Activity in the allowance for doubtful accounts is as follows:



(Dollars in millions)	Balance at Beginning of Period		Charges (Credit) to Operations		Deductions ^(a)		Balance at End of Period
Fiscal year ended July 3, 2015	$	12	—		(3	)	$	9
Fiscal year ended July 1, 2016	$	9	1		(1	)	$	9
Fiscal year ended June 30, 2017	$	9	(4	)	—		$	5

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(a)	Uncollectible accounts written off, net of recoveries.

Inventories

The following table provides details of the inventory balance sheet item:



(Dollars in millions)	June 30, 2017		July 1, 2016
Raw materials and components	$	350	$	307
Work-in-process	257		297
Finished goods	375		264
	$	982	$	868

Property, Equipment and Leasehold Improvements, net

The components of property, equipment and leasehold improvements, net were as follows:



(Dollars in millions)	Useful Life in Years	June 30, 2017			July 1, 2016
Land and land improvements		$	54		$	69
Equipment	3 – 5	7,536			7,681
Buildings and leasehold improvements	Up to 30	1,899			1,900
Construction in progress		144			234
		9,633			9,884
Less: accumulated depreciation and amortization		(7,758		)	(7,724		)
		$	1,875		$	2,160

Depreciation expense, which includes amortization of leasehold improvements, was $581 million, $641 million and $689 million for fiscal years 2017, 2016 and 2015, respectively. Interest on borrowings related to eligible capital expenditures is capitalized as part of the cost of the qualified assets and amortized over the estimated useful lives of the assets. During fiscal years 2017, 2016 and 2015, the Company capitalized interest of $4 million, $13 million and $15 million, respectively.

In fiscal years 2017 and 2016, the Company determined it would discontinue the use of certain manufacturing property and equipment in the short-term, and that certain other buildings, land and manufacturing property and equipment were permanently impaired. As a result, the company recognized charges of $72 million and $53 million in fiscal years 2017 and 2016, respectively, from the write-off and accelerated depreciation of these fixed assets, included $35 million impairment on land and buildings in fiscal year 2017, classified as held for sale under Other current assets in the Consolidated Balance Sheet. Please refer to Note 9. Fair Value for more details. In fiscal year 2017, total charges of $35 million, $35 million and $2 million was recorded to Cost of revenue, Product development and Marketing and administrative, respectively, in the Consolidated Statement of Operations. In fiscal year 2016, the entire amount was recorded in Cost of revenue in the Consolidated Statement of Operations. The Company did not record any material impairment in fiscal year 2015.

Accrued Expenses

The following table provides details of the accrued expenses balance sheet item:



(Dollars in millions)	June 30, 2017		July 1, 2016
Dividends payable	$	184	$	—
Other accrued expenses	466		444
Total	$	650	$	444

Accumulated Other Comprehensive Income (Loss) (“AOCI”)

The components of AOCI, net of tax, were as follows:



(Dollars in millions)	Unrealized Gains (Losses) on Cash Flow Hedges			Unrealized Gains (Losses) on Marketable Securities ^(a)		Unrealized Gains (Losses) on Post- Retirement Plans			Foreign Currency Translation Adjustments			Total
Balance at July 3, 2015	$	1		$	—	$	(15	)	$	(16	)	$	(30	)
Other comprehensive income (loss) before reclassifications	(4		)	—		8			(1		)	3
Amounts reclassified from AOCI	2			—		—			—			2
Other comprehensive income (loss)	(2		)	—		8			(1		)	5
Balance at July 1, 2016	(1		)	—		(7		)	(17		)	(25		)
Other comprehensive income (loss) before reclassifications	(3		)	—		—			5			2
Amounts reclassified from AOCI	4			—		2			—			6
Other comprehensive income (loss)	1			—		2			5			8
Balance at June 30, 2017	$	—		$	—	$	(5	)	$	(12	)	$	(17	)

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(a)	The cost of a security sold or the amount reclassified out of AOCI into earnings was determined using the specific identification method.