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Income Taxes (Tables)

12 Months Ended

Sep. 26, 2015

Provision for Income Taxes

The provision for income taxes for 2015, 2014 and 2013, consisted of the following (in millions):

		2015				2014				2013
Federal:
Current		$	11,730			$	8,624			$	9,334
Deferred			3,408				3,183				1,878
			15,138				11,807				11,212
State:
Current			1,265				855				1,084
Deferred			(220	)			(178	)			(311	)
			1,045				677				773
Foreign:
Current			4,744				2,147				1,559
Deferred			(1,806	)			(658	)			(426	)
			2,938				1,489				1,133
Provision for income taxes		$	19,121			$	13,973			$	13,118

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 2015, 2014 and 2013) to income before provision for income taxes for 2015, 2014 and 2013, is as follows (dollars in millions):

		2015				2014				2013
Computed expected tax		$	25,380			$	18,719			$	17,554
State taxes, net of federal effect			680				469				508
Indefinitely invested earnings of foreign subsidiaries			(6,470	)			(4,744	)			(4,614	)
Domestic production activities deduction			(426	)			(495	)			(308	)
Research and development credit, net			(171	)			(88	)			(287	)
Other			128				112				265
Provision for income taxes		$	19,121			$	13,973			$	13,118
Effective tax rate			26.4%				26.1%				26.2%

Significant Components of Deferred Tax Assets and Liabilities

As of September 26, 2015 and September 27, 2014, the significant components of the Company’s deferred tax assets and liabilities were (in millions):

		2015				2014
Deferred tax assets:
Accrued liabilities and other reserves		$	4,205			$	3,326
Basis of capital assets and investments			2,238				898
Deferred revenue			1,941				1,787
Deferred cost sharing			667				0
Share-based compensation			575				454
Unrealized losses			564				130
Other			721				227
Total deferred tax assets, net of valuation allowance of $0			10,911				6,822
Deferred tax liabilities:
Unremitted earnings of foreign subsidiaries			26,868				21,544
Other			303				398
Total deferred tax liabilities			27,171				21,942
Net deferred tax liabilities		$	(16,260	)		$	(15,120	)

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 2015, 2014 and 2013, is as follows (in millions):

		2015				2014				2013
Beginning Balance		$	4,033			$	2,714			$	2,062
Increases related to tax positions taken during a prior year			2,056				1,295				745
Decreases related to tax positions taken during a prior year			(345	)			(280	)			(118	)
Increases related to tax positions taken during the current year			1,278				882				626
Decreases related to settlements with taxing authorities			(109	)			(574	)			(592	)
Decreases related to expiration of statute of limitations			(13	)			(4	)			(9	)
Ending Balance		$	6,900			$	4,033			$	2,714

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.

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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.

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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

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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



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