Annual report pursuant to Section 13 and 15(d)

Income Taxes (Tables)

v3.23.3
Income Taxes (Tables)
 12 Months Ended
Sep. 24, 2023
Income Tax Disclosure [Abstract]  
Components of Income Tax Expense (Benefit)
The components of the income tax provision from continuing operations were as follows (in millions):
2023 2022 2021
Current provision:      
Federal $ 1,229  $ 1,114  $ 942 
State 10  1  8 
Foreign (1) 491  906  518 
1,730  2,021  1,468 
Deferred (benefit) provision:      
Federal (1,475) (34) (251)
State (8) 15  2 
Foreign (1) (143) 10  12 
(1,626) (9) (237)
$ 104  $ 2,012  $ 1,231 
Income before Income Tax, Domestic and Foreign
The components of income from continuing operations before income taxes by U.S. and foreign jurisdictions were as follows (in millions):
2023 2022 2021
United States $ 6,400  $ 12,537  $ 8,781 
Foreign 1,043  2,461  1,493 
$ 7,443  $ 14,998  $ 10,274 
Effective Income Tax Rate Reconciliation
The following is a reconciliation of the expected statutory federal income tax provision to our actual income tax provision from continuing operations (in millions, except percentages). A significant portion of our U.S. income qualifies for preferential treatment as FDII (foreign-derived intangible income) at a 13% effective tax rate.
2023 2022 2021
Expected income tax provision at federal statutory tax rate $ 1,563  $ 3,150  $ 2,158 
Benefit from FDII deduction related to capitalizing research and development expenditures (598) —  — 
Benefit from FDII deduction, excluding the impact of capitalizing research and development expenditures (447) (753) (550)
Benefit related to research and development tax credits (235) (224) (195)
Benefit from fiscal 2021 and 2022 FDII deductions related to a change in sourcing of research and development expenditures (126) —  — 
Benefit from releasing valuation allowance on unutilized foreign loss carryforwards (114) —  — 
Foreign currency (gains) losses related to Korean withholding tax receivable (66) 243  12 
Shortfall (excess) tax benefit associated with share-based awards 3  (257) (265)
Nontaxable reversal of 2018 EC fine —  (224) — 
Other 124  77  71 
$ 104  $ 2,012  $ 1,231 
Effective tax rate 1  % 13  % 12  %
Deferred Tax Assets and Liabilities
We had deferred tax assets and deferred tax liabilities as follows (in millions):
September 24,
2023		 September 25,
2022
Unused tax credits $ 1,819  $ 1,624 
Capitalized research and development expenditures
 1,490  — 
Customer incentives 659  807 
Accrued liabilities and reserves 401  264 
Unused net operating losses 364  887 
Share-based compensation 285  225 
Operating lease liabilities 216  202 
Unrealized losses on other investments and marketable securities 159  197 
Other 409  435 
Total gross deferred tax assets 5,802  4,641 
Valuation allowance (1,803) (2,223)
Total net deferred tax assets 3,999  2,418 
Intangible assets (335) (315)
Operating lease assets (194) (184)
Unrealized gains on other investments and marketable securities (101) (84)
Property, plant and equipment (52) (101)
Other (118) (98)
Total deferred tax liabilities (800) (782)
Net deferred tax assets $ 3,199  $ 1,636 
Reported as:    
Non-current deferred tax assets $ 3,310  $ 1,803 
        Non-current deferred tax liabilities (1) (111) (167)
$ 3,199  $ 1,636 
(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 2023, 2022 and 2021 follows (in millions):
2023 2022 2021
Beginning balance of unrecognized tax benefits $ 2,191  $ 2,136  $ 1,901 
Additions based on prior year tax positions 10  58  56 
Reductions for prior year tax positions and lapse in statute of limitations (63) (136) (13)
Additions for current year tax positions 158  184  213 
Settlements with taxing authorities —  (51) (21)
Ending balance of unrecognized tax benefits $ 2,296  $ 2,191  $ 2,136