Business Combinations

12 Months Ended

Jul. 03, 2015

Business Combinations [Abstract]

BUSINESS COMBINATIONS

NOTE 4: BUSINESS COMBINATIONS

During fiscal 2015 we made one significant acquisition. On May 29, 2015, we acquired Exelis, a diversified, top-tier global aerospace, defense, information and services company that leverages a 50-year legacy of deep customer knowledge and technical expertise to deliver affordable, mission-critical solutions for global customers. Exelis is a leader in positioning and navigation, sensors, air traffic management solutions, image processing and distribution, communications and information systems; and focused on strategic growth in the areas of critical networks, intelligence, surveillance and reconnaissance (“ISR”) and analytics, electronic warfare and composite aerostructures.We acquired 100 percent of Exelis in a cash and stock transaction. The total net purchase price was approximately $4.7 billion, including approximately $1.5 billion in Company sharesand $3.2 billion in cash, net of cash acquired. Upon closing, our shareholders owned approximately 84 percent of the combined company, and Exelis shareholders owned approximately 16 percent of the combined company.The source of funds for the cash payment was cash on hand and third-party debt financing, including a combination of borrowings under a new secured term loan facility in an aggregate amount of $1.3 billion and a portion of the proceeds from the issuance of new debt securities in an aggregate principal amount of $2.4 billion. See Note 13: Long-term Debt for additional information. In fiscal 2015, wereportedExelis asaseparate business segment.

The goodwill resulting from the Exelis acquisition was primarily associated with Exelis' market presence and leading positions, growth opportunities in the markets in which they operated, experienced work force and established operating infrastructures. Most of the goodwill related to the Exelisacquisition is nondeductible for tax purposes.