v2.4.0.6

Income Taxes (Tables)

12 Months Ended

Sep. 29, 2012

Provision for Income Taxes

The provision for income taxes for 2012, 2011, and 2010, consisted of the following (in millions):

		2012				2011				2010
Federal:
Current		$	7,240			$	3,884			$	2,150
Deferred			5,018				2,998				1,676
			12,258				6,882				3,826
State:
Current			1,182				762				655
Deferred			(123	)			37				(115	)
			1,059				799				540
Foreign:
Current			1,203				769				282
Deferred			(490	)			(167	)			(121	)
			713				602				161
Provision for income taxes		$	14,030			$	8,283			$	4,527

Reconciliation of Provision for Income Taxes

A reconciliation of the provision for income taxes, with the amount computed by applying the statutory federal income tax rate (35% in 2012, 2011 and 2010) to income before provision for income taxes for 2012, 2011, and 2010, is as follows (in millions):

		2012				2011				2010
Computed expected tax		$	19,517			$	11,973			$	6,489
State taxes, net of federal effect			677				552				351
Indefinitely invested earnings of foreign subsidiaries			(5,895	)			(3,898	)			(2,125	)
Research and development credit, net			(103	)			(167	)			(23	)
Domestic production activities deduction			(328	)			(168	)			(48	)
Other			162				(9	)			(117	)
Provision for income taxes		$	14,030			$	8,283			$	4,527
Effective tax rate			25.2%				24.2%				24.4%

Significant Components of Deferred Tax Assets and Liabilities

As of September 29, 2012 and September 24, 2011, the significant components of the Company’s deferred tax assets and liabilities were (in millions):

		2012				2011
Deferred tax assets:
Accrued liabilities and other reserves		$	2,101			$	1,610
Basis of capital assets and investments			447				390
Share-based compensation			395				355
Other			1,094				795
Total deferred tax assets			4,037				3,150
Less valuation allowance			0				0
Deferred tax assets, net of valuation allowance			4,037				3,150
Deferred tax liabilities:
Unremitted earnings of foreign subsidiaries			14,712				8,896
Other			193				272
Total deferred tax liabilities			14,905				9,168
Net deferred tax liabilities		$	(10,868	)		$	(6,018	)

Aggregate Changes in Gross Unrecognized Tax Benefits Excluding Interest and Penalties

The aggregate changes in the balance of gross unrecognized tax benefits, which excludes interest and penalties, for 2012, 2011, and 2010, is as follows (in millions):

		2012				2011				2010
Beginning Balance		$	1,375			$	943			$	971
Increases related to tax positions taken during a prior year			340				49				61
Decreases related to tax positions taken during a prior year			(107	)			(39	)			(224	)
Increases related to tax positions taken during the current year			467				425				240
Decreases related to settlements with taxing authorities			(3	)			0				(102	)
Decreases related to expiration of statute of limitations			(10	)			(3	)			(3	)
Ending Balance		$	2,062			$	1,375			$	943

X

- Definition

Tabular disclosure of the components of income tax expense attributable to continuing operations for each year presented including, but not limited to: current tax expense (benefit), deferred tax expense (benefit), investment tax credits, government grants, the benefits of operating loss carryforwards, tax expense that results from allocating certain tax benefits either directly to contributed capital or to reduce goodwill or other noncurrent intangible assets of an acquired entity, adjustments of a deferred tax liability or asset for enacted changes in tax laws or rates or a change in the tax status of the entity, and adjustments of the beginning-of-the-year balances of a valuation allowance because of a change in circumstances that causes a change in judgment about the realizability of the related deferred tax asset in future years.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 740

-SubTopic 10

-Section 50

-Paragraph 9

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X

- Definition

Tabular disclosure of the components of net deferred tax asset or liability recognized in an entity's statement of financial position, including the following: the total of all deferred tax liabilities, the total of all deferred tax assets, the total valuation allowance recognized for deferred tax assets.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 740

-SubTopic 10

-Section 50

-Paragraph 2

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- Definition

Tabular disclosure of the reconciliation using percentage or dollar amounts of the reported amount of income tax expense attributable to continuing operations for the year to the amount of income tax expense that would result from applying domestic federal statutory tax rates to pretax income from continuing operations.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 740

-SubTopic 10

-Section 50

-Paragraph 12

-URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32687-109319

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X

- Definition

Tabular disclosure of unrecognized tax benefits for which a material change is reasonably possible in the next twelve months, typically including the nature of the uncertainty, the event(s) that could cause a material change, and an estimate of the range of the reasonably possible change or a statement that an estimate of the range cannot be made. An unrecognized tax benefit is the difference between a tax position taken in a tax return and the amounts recognized in the financial statements for which it is more likely than not, based on the technical merits of the position, that the tax position will not be sustained upon examination.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 740

-SubTopic 10

-Section 50

-Paragraph 15

-Subparagraph (d)

-URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319



Reference 2: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name FASB Interpretation (FIN)

-Number 48

-Paragraph 21

-Subparagraph d

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

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