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Derivative Financial Instruments (Tables)

6 Months Ended

Dec. 29, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of notional value of outstanding foreign currency forward exchange contracts

The following tables show the total notional value of the Company’s outstanding foreign currency forward exchange contracts as of December 29, 2023 and June 30, 2023. All of the foreign currency forward exchange contracts mature within 12 months:

						As of December 29, 2023
(Dollars in millions)						Contracts Designated as Hedges						Contracts Not Designated as Hedges
Singapore Dollar						$	126					$	102
Thai Baht						95						16
Chinese Renminbi						40						19
British Pound Sterling						38						7
Total						$	299					$	144

						As of June 30, 2023
(Dollars in millions)						Contracts Designated as Hedges						Contracts Not Designated as Hedges
Singapore Dollar						$	195					$	161
Thai Baht						129						16
Chinese Renminbi						64						12
British Pound Sterling						57						8
Total						$	445					$	197

Schedule of gross fair value of derivative instruments

The following tables show the Company’s derivative instruments measured at gross fair value as reflected in the Condensed Consolidated Balance Sheets as of December 29, 2023 and June 30, 2023:

As of December 29, 2023

Derivative Assets

Derivative Liabilities

(Dollars in millions)

Balance Sheet Location

Fair Value

Balance Sheet Location

Fair Value

Derivatives designated as hedging instruments:

Foreign currency forward exchange contracts

Other current assets

$

5

Accrued expenses

$

(1)

Derivatives not designated as hedging instruments:

Foreign currency forward exchange contracts

Other current assets

1

Accrued expenses

—

Total derivatives

$

6

$

(1)

As of June 30, 2023

Derivative Assets

Derivative Liabilities

(Dollars in millions)

Balance Sheet Location

Fair Value

Balance Sheet Location

Fair Value

Derivatives designated as hedging instruments:

Foreign currency forward exchange contracts

Other current assets

$

2

Accrued expenses

$

(10)

Interest rate swap

Other current assets

20

Accrued expenses

—

Derivatives not designated as hedging instruments:

Foreign currency forward exchange contracts

Other current assets

—

Accrued expenses

(1)

Total return swap

Other current assets

1

Accrued expenses

—

Total derivatives

$

23

$

(11)

Schedule of the effect of derivative instruments on Other comprehensive income (loss) and the Consolidated Statement of Operations

The following tables show the effect of the Company’s derivative instruments on the Condensed Consolidated Statements of Comprehensive Income and the Condensed Consolidated Statements of Operations for the three and six months ended December 29, 2023:

												Amount of Gain/(Loss) Recognized in Income on Derivatives
(Dollars in millions) Derivatives Not Designated as Hedging Instruments						Location of Gain/(Loss) Recognized in Income on Derivatives						For the Three Months						For the Six Months
Foreign currency forward exchange contracts						Other, net						$	6					$	—
Total return swap						Operating expenses						(13)						(16)

(Dollars in millions) Derivatives Designated as Hedging Instruments						Amount of Gain/(Loss) Recognized in OCI on Derivatives (Effective Portion)												Location of Gain/(Loss) Reclassified from Accumulated OCI into Income (Effective Portion)						Amount of Gain/(Loss) Reclassified from Accumulated OCI into Income (Effective Portion)												Location of Gain/(Loss) Recognized in Income on Derivatives (Ineffective Portion and Amount Excluded from Effectiveness Testing(1)						Amount of Gain/(Loss) Recognized in Income (Ineffective Portion and Amount Excluded from Effectiveness Testing)
						For the Three Months						For the Six Months												For the Three Months						For the Six Months												For the Three Months						For the Six Months
Foreign currency forward exchange contracts						$	13					$	6					Cost of revenue						$	(5)					$	(6)					Other, net						$	1					$	1
Interest rate swap						—						(15)						Interest expense						—						11						Net gain recognized from termination of interest rate swap						—						104

(1)The net gain recognized into earnings as a result of the discontinuance of interest rate swap during the six months ended December 29, 2023.

The following tables show the effect of the Company’s derivative instruments on the Condensed Consolidated Statements of Comprehensive Income and the Condensed Consolidated Statements of Operations for the three and six months ended December 30, 2022:

(Dollars in millions) Derivatives Not Designated as Hedging Instruments						Location of Gain/(Loss) Recognized in Income on Derivatives						Amount of Gain/(Loss) Recognized in Income on Derivatives
												For the Three Months						For the Six Months
Foreign currency forward exchange contracts						Other, net						$	4					$	(6)
Total return swap						Operating expenses						—						(8)

(Dollars in millions) Derivatives Designated as Hedging Instruments						Amount of Gain/(Loss) Recognized in OCI on Derivatives (Effective Portion)												Location of Gain/(Loss) Reclassified from Accumulated OCI into Income (Effective Portion)						Amount of Gain/(Loss) Reclassified from Accumulated OCI into Income (Effective Portion)												Location of Gain/(Loss) Recognized in Income on Derivatives (Ineffective Portion and Amount Excluded from Effectiveness Testing)						Amount of Gain/(Loss) Recognized in Income (Ineffective Portion and Amount Excluded from Effectiveness Testing)
						For the Three Months						For the Six Months												For the Three Months						For the Six Months												For the Three Months						For the Six Months
Foreign currency forward exchange contracts						$	19					$	(1)					Cost of revenue						$	(12)					$	(19)					Other, net						$	—					$	(1)
Interest rate swap						—						52						Interest expense						6						8						Interest expense						—						—

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Tabular disclosure of the location and amount of derivative instruments and nonderivative instruments designated as hedging instruments reported before netting adjustments, and the amount of gain (loss) on derivative instruments and nonderivative instruments designated and qualified as hedging instruments.

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-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 4E
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Tabular disclosure of the location and fair value amounts of derivative instruments (and nonderivative instruments that are designated and qualify as hedging instruments) reported in the statement of financial position.

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Tabular disclosure of the notional amounts of outstanding derivative positions.

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