Income Taxes (Tables)
|
12 Months Ended |
Sep. 27, 2020 |
Income Tax Disclosure [Abstract] |
|
Components of Income Tax Expense (Benefit) |
The components of the income tax provision were as follows (in millions):
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2020 |
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2019 |
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2018 |
Current provision (benefit): |
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|
|
|
Federal |
$ |
210 |
|
|
$ |
1,563 |
|
|
$ |
2,559 |
|
State |
1 |
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|
2 |
|
|
(1) |
|
Foreign |
526 |
|
|
(407) |
|
|
777 |
|
|
737 |
|
|
1,158 |
|
|
3,335 |
|
Deferred provision (benefit): |
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|
|
|
|
Federal |
(192) |
|
|
2,037 |
|
|
1,846 |
|
State |
2 |
|
|
17 |
|
|
1 |
|
Foreign |
(26) |
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|
(117) |
|
|
174 |
|
|
(216) |
|
|
1,937 |
|
|
2,021 |
|
|
$ |
521 |
|
|
$ |
3,095 |
|
|
$ |
5,356 |
|
|
Income before Income Tax, Domestic and Foreign |
The components of income before income taxes by U.S. and foreign jurisdictions were as follows (in millions):
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2020 |
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2019 |
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2018 |
United States |
$ |
5,004 |
|
|
$ |
7,042 |
|
|
$ |
(1,834) |
|
Foreign |
715 |
|
|
439 |
|
|
2,226 |
|
|
$ |
5,719 |
|
|
$ |
7,481 |
|
|
$ |
392 |
|
|
Effective Income Tax Rate Reconciliation |
The following is a reconciliation of the expected statutory federal income tax provision to our actual income tax provision (in millions, except percentages):
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2020 |
|
2019 |
|
2018 |
Expected income tax provision at federal statutory tax rate |
$ |
1,201 |
|
|
$ |
1,571 |
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|
$ |
97 |
|
State income tax provision, net of federal benefit |
7 |
|
|
10 |
|
|
2 |
|
Benefit from foreign-derived intangible income (FDII) deduction |
(381) |
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|
(419) |
|
|
— |
|
Benefit related to research and development tax credits |
(125) |
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|
(110) |
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|
(136) |
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Excess tax benefit associated with share-based awards |
(83) |
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|
(27) |
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|
(20) |
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Benefit from foreign income taxed at other than U.S. rates |
(11) |
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|
(54) |
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|
(834) |
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Derecognition of deferred tax asset on distributed intellectual property |
— |
|
|
2,472 |
|
|
— |
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Benefit from establishing new U.S. net deferred tax assets |
— |
|
|
(570) |
|
|
— |
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Nondeductible charges (reversals) related to the EC, KFTC and TFTC investigations |
— |
|
|
51 |
|
|
(119) |
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Toll Charge from U.S. tax reform |
— |
|
|
— |
|
|
5,236 |
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Valuation allowance on deferred tax assets related to the NXP termination fee |
— |
|
|
— |
|
|
494 |
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Remeasurement of deferred taxes due to changes in the statutory rate due to U.S. tax reform |
— |
|
|
— |
|
|
443 |
|
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|
|
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Other |
(87) |
|
|
171 |
|
|
193 |
|
|
$ |
521 |
|
|
$ |
3,095 |
|
|
$ |
5,356 |
|
Effective tax rate |
9 |
% |
|
41 |
% |
|
N/M |
|
Deferred Tax Assets and Liabilities |
We had deferred tax assets and deferred tax liabilities as follows (in millions):
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|
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|
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|
September 27, 2020 |
|
September 29, 2019 |
Unused tax credits |
$ |
1,311 |
|
|
$ |
1,137 |
|
Accrued liabilities and reserves |
812 |
|
|
648 |
|
Unused net operating losses |
576 |
|
|
619 |
|
Unearned revenues |
262 |
|
|
376 |
|
Unrealized losses on other investments and marketable securities |
235 |
|
|
164 |
|
Share-based compensation |
151 |
|
|
115 |
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Operating lease liabilities |
107 |
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|
— |
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Other |
141 |
|
|
144 |
|
Total gross deferred tax assets |
3,595 |
|
|
3,203 |
|
Valuation allowance |
(1,728) |
|
|
(1,672) |
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Total net deferred tax assets |
1,867 |
|
|
1,531 |
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Intangible assets |
(181) |
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|
(216) |
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Property, plant and equipment |
(162) |
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|
(102) |
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Operating lease assets |
(100) |
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|
— |
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Unrealized gains on other investments and marketable securities |
(97) |
|
|
(99) |
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Other |
(32) |
|
|
(21) |
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Total deferred tax liabilities |
(572) |
|
|
(438) |
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Net deferred tax assets |
$ |
1,295 |
|
|
$ |
1,093 |
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Reported as: |
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|
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Non-current deferred tax assets |
$ |
1,351 |
|
|
$ |
1,196 |
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|
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Non-current deferred tax liabilities (1) |
(56) |
|
|
(103) |
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|
$ |
1,295 |
|
|
$ |
1,093 |
|
(1)Non-current deferred tax liabilities were included in other liabilities in the consolidated balance sheets.
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Unrecognized Tax Benefits Roll Forward |
A summary of the changes in the amount of unrecognized tax benefits for fiscal 2020, 2019 and 2018 follows (in millions):
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2020 |
|
2019 |
|
2018 |
Beginning balance of unrecognized tax benefits |
$ |
1,705 |
|
|
$ |
217 |
|
|
$ |
372 |
|
Additions based on prior year tax positions |
20 |
|
|
1,238 |
|
|
7 |
|
Reductions for prior year tax positions and lapse in statute of limitations |
(2) |
|
|
(3) |
|
|
(11) |
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Additions for current year tax positions |
192 |
|
|
253 |
|
|
18 |
|
Settlements with taxing authorities |
(14) |
|
|
— |
|
|
(169) |
|
Ending balance of unrecognized tax benefits |
$ |
1,901 |
|
|
$ |
1,705 |
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|
$ |
217 |
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