Annual report pursuant to Section 13 and 15(d)

Income Taxes (Tables)

v3.10.0.1
Income Taxes (Tables)
12 Months Ended
Sep. 30, 2018
Income Tax Disclosure [Abstract]  
Components of Income Tax Expense (Benefit)
The components of the income tax provision were as follows (in millions):
 
2018
 
2017
 
2016
Current provision (benefit):
 
 
 
 
 
Federal
$
2,559

 
$
72

 
$
4

State
(1
)
 
3

 
4

Foreign
777

 
1,256

 
1,411

 
3,335

 
1,331

 
1,419

Deferred provision (benefit):
 
 
 
 
 
Federal
1,867

 
(586
)
 
(184
)
State
1

 
4

 
6

Foreign
174

 
(194
)
 
(110
)
 
2,042

 
(776
)
 
(288
)
 
$
5,377

 
$
555

 
$
1,131

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):
 
2018
 
2017
 
2016
United States
$
(1,713
)
 
$
(762
)
 
$
3,032

Foreign
2,226

 
3,782

 
3,801

 
$
513

 
$
3,020

 
$
6,833

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):
 
2018
 
2017
 
2016
Expected income tax provision at federal statutory tax rate
$
127

 
$
1,057

 
$
2,392

State income tax provision, net of federal benefit
2

 
8

 
19

Toll Charge from U.S. tax reform
5,236

 

 

Benefits from foreign income taxed at other than U.S. rates
(834
)
 
(963
)
 
(1,068
)
Valuation allowance on deferred tax assets related to NXP termination fee (Note 9)
494

 

 

Remeasurement of deferred taxes due to changes in statutory rate due to U.S. tax reform
438

 

 

Benefits related to research and development tax credits
(136
)
 
(81
)
 
(143
)
Nondeductible charges and reversals related to the EC, KFTC and TFTC investigations
(119
)
 
363

 

Taxes on undistributed foreign earnings
87

 

 

Impact of changes in tax reserves and audit settlements for prior year tax positions

 
111

 

Worthless stock deduction of domestic subsidiary

 

 
(101
)
Other
82

 
60

 
32

 
$
5,377

 
$
555

 
$
1,131

Summary of Income Tax Holiday
Without these tax incentives, our income tax expense would have been higher and impacted earnings (loss) per share attributable to Qualcomm as follows (in millions, except per share amounts):
 
2018
 
2017
 
2016
Additional income tax expense
$
652

 
$
493

 
$
487

Reduction to diluted earnings (loss) per share
0.45

 
0.33

 
0.32

Deferred Tax Assets and Liabilities
We had deferred tax assets and deferred tax liabilities as follows (in millions):
 
September 30, 2018
 
September 24, 2017
Unused tax credits
$
1,044

 
$
1,798

Unused net operating losses
696

 
208

Unearned revenues
446

 
886

Accrued liabilities and reserves
396

 
888

Unrealized losses on other investments and marketable securities
126

 
151

Share-based compensation
97

 
241

Other
26

 
21

Total gross deferred tax assets
2,831

 
4,193

Valuation allowance
(1,529
)
 
(863
)
Total net deferred tax assets
1,302

 
3,330

Intangible assets
(322
)
 
(535
)
Accrued revenues
(202
)
 

Accrued withholding taxes
(90
)
 

Unrealized gains on other investments and marketable securities
(26
)
 
(33
)
Other
(49
)
 
(95
)
Total deferred tax liabilities
(689
)
 
(663
)
Net deferred tax assets
$
613

 
$
2,667

Reported as:
 
 
 
Non-current deferred tax assets
$
904

 
$
2,900

Non-current deferred tax liabilities (1)
(291
)
 
(233
)
 
$
613

 
$
2,667

(1)
Non-current deferred tax liabilities were included in other liabilities in the consolidated balance sheets.
Unrecognized Tax Benefits Roll Forward
A summary of the changes in the amount of unrecognized tax benefits for fiscal 2018, 2017 and 2016 follows (in millions):
 
2018
 
2017
 
2016
Beginning balance of unrecognized tax benefits
$
372

 
$
271

 
$
40

Additions based on prior year tax positions
7

 
92

 
20

Reductions for prior year tax positions and lapse in statute of limitations
(11
)
 
(11
)
 
(6
)
Additions for current year tax positions
18

 
23

 
218

Settlements with taxing authorities
(169
)
 
(3
)
 
(1
)
Ending balance of unrecognized tax benefits
$
217

 
$
372

 
$
271