Annual report pursuant to Section 13 and 15(d)

Income Taxes (Tables)

v3.21.2
Income Taxes (Tables)
 12 Months Ended
Sep. 26, 2021
Income Tax Disclosure [Abstract]  
Components of Income Tax Expense (Benefit) The components of the income tax provision were as follows (in millions):
2021 2020 2019
Current provision (benefit):      
Federal $ 942  $ 210  $ 1,563 
State 8  1  2 
Foreign 518  526  (407)
1,468  737  1,158 
Deferred (benefit) provision:      
Federal (251) (192) 2,037 
State 2  2  17 
Foreign 12  (26) (117)
(237) (216) 1,937 
$ 1,231  $ 521  $ 3,095 
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):
2021 2020 2019
United States $ 8,781  $ 5,004  $ 7,042 
Foreign 1,493  715  439 
$ 10,274  $ 5,719  $ 7,481 
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). Substantially all of our income is in the U.S., of which a significant portion qualifies for preferential treatment as FDII at a 13% effective tax rate.
2021 2020 2019
Expected income tax provision at federal statutory tax rate $ 2,158  $ 1,201  $ 1,571 
Benefit from FDII deduction (550) (381) (419)
Excess tax benefit associated with share-based awards (265) (83) (27)
Benefit related to research and development tax credits (195) (125) (110)
Derecognition of deferred tax asset on distributed intellectual property —  —  2,472 
Benefit from establishing new U.S. net deferred tax assets —  —  (570)
Other 83  (91) 178 
$ 1,231  $ 521  $ 3,095 
Effective tax rate 12  % 9  % 41  %
Deferred Tax Assets and Liabilities
We had deferred tax assets and deferred tax liabilities as follows (in millions):
September 26,
2021		 September 27,
2020
Unused tax credits $ 1,504  $ 1,311 
Customer incentives 762  537 
Unused net operating losses 663  576 
Accrued liabilities and reserves 483  275 
Operating lease liabilities 188  107 
Unearned revenues 181  262 
Share-based compensation 175  151 
Unrealized losses on other investments and marketable securities 106  235 
Other 165  141 
Total gross deferred tax assets 4,227  3,595 
Valuation allowance (1,926) (1,728)
Total net deferred tax assets 2,301  1,867 
Unrealized gains on other investments and marketable securities (215) (97)
Intangible assets (198) (181)
Operating lease assets (174) (100)
Property, plant and equipment (111) (162)
Other (76) (32)
Total deferred tax liabilities (774) (572)
Net deferred tax assets $ 1,527  $ 1,295 
Reported as:    
Non-current deferred tax assets $ 1,591  $ 1,351 
        Non-current deferred tax liabilities (1) (64) (56)
$ 1,527  $ 1,295 
(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 2021, 2020 and 2019 follows (in millions):
2021 2020 2019
Beginning balance of unrecognized tax benefits $ 1,901  $ 1,705  $ 217 
Additions based on prior year tax positions 56  20  1,238 
Reductions for prior year tax positions and lapse in statute of limitations (13) (2) (3)
Additions for current year tax positions 213  192  253 
Settlements with taxing authorities (21) (14) — 
Ending balance of unrecognized tax benefits $ 2,136  $ 1,901  $ 1,705