Income Taxes

12 Months Ended

Jul. 03, 2015

Income Taxes [Abstract]

INCOME TAXES

NOTE 23: INCOME TAXES

The provisions for current and deferredincome taxes are summarized as follows:

		2015		2014		2013
		(In millions)
Current:
	United States	$	150	$	213	$	189
	International		8		11		12
	State and local		13		12		21
			171		236		222
Deferred:
	United States		(30)		5		(17)
	International		4		―		(2)
	State and local		(2)		15		―
			(28)		20		(19)
		$	143	$	256	$	203

The total income tax provision is summarized as follows:

	2015		2014		2013
	(In millions)
Continuing operations	$	143	$	256	$	203
Discontinued operations		―		(10)		(22)
Total income tax provision	$	143	$	246	$	181

The components of deferred income tax assets (liabilities) were as follows:

		2015					2014
		Current		Non-Current			Current		Non-Current
	(In millions)
Inventory valuations		$	46		$	—	$	15		$	—
Accruals			182			117		78			106
Deferred revenue			30			8		11			9
Depreciation			—			(75)		—			(13)
Unbilled receivables			(34)			—		—			—
Domestic tax loss and credit carryforwards			—			28		—			19
International tax loss and credit carryforwards			—			42		—			40
International research and development expense deferrals			—			12		—			21
Acquired intangibles			—			(641)		—			(71)
Share-based compensation			—			32		—			25
Long-term debt			—			22		—			—
Unremitted earnings of foreign subsidiaries			(2)			(57)		—			—
Pension and other post employment benefits			106			714		12			9
Unrealized loss on interest rate hedges			—			12		—			—
Unrecognized tax benefits			3			14		—			13
All other — net			11			(8)		2			(11)
			342			220		118			147
Valuation allowance			(8)			(64)		(8)			(60)
		$	334		$	156	$	110		$	87

A reconciliation of the United States statutory income tax rate to our effective income tax rate follows:

	2015		2014		2013
U.S. statutory income tax rate	35.0	%	35.0	%	35.0	%
State taxes	0.9		2.0		1.5
International income	(1.7)		(1.1)		―
Nondeductible goodwill	1.8		―		―
Research and development tax credit	(1.7)		(0.9)		(1.3)
U.S. production activity benefit	(3.7)		(2.7)		(3.1)
Cash repatriation	1.4		―		―
Settlement of tax audits	(1.8)		(0.6)		(1.2)
Other items	(0.3)		0.5		(0.4)
Effective income tax rate	29.9	%	32.2	%	30.5	%

	2015		2014		2013
	(In millions)
Balance at beginning of fiscal year	$	72	$	74	$	48
Additions based on tax positions taken during current fiscal year		5		7		17
Additions based on tax positions taken during prior fiscal years		5		18		20
Additions for tax positions related to acquired entities		68		―		―
Decreases based on tax positions taken during prior fiscal years		(8)		(12)		(9)
Decreases from lapse of statutes of limitations		(1)		―		―
Decreases from settlements		(17)		(15)		(2)
Balance at end of fiscal year	$	124	$	72	$	74