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Income Taxes | 12 Months Ended
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Oct. 29, 2023
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes The components of income before income taxes by U.S. and foreign jurisdictions were as follows:
|  | Fiscal Year
|  | 2023 |  | 2022 |  | 2021
|  | (In millions)
Domestic loss |  | $ | (63) |  |  | $ | (2,020) |  |  | $ | (3,103) |
Foreign income |  | 15,160 |  |  | 14,454 |  |  | 9,868 |
Income before income taxes |  | $ | 15,097 |  |  | $ | 12,434 |  |  | $ | 6,765 |
The components of the provision for income taxes were as follows:
|  | Fiscal Year
|  | 2023 |  | 2022 |  | 2021
|  | (In millions)
Current tax provision: |  |  |  |  |  |
Federal |  | $ | 952 |  |  | $ | 174 |  |  | $ | 446 |
State |  | 23 |  |  | 48 |  |  | 46 |
Foreign |  | 541 |  |  | 762 |  |  | 534 |
Total |  | 1,516 |  |  | 984 |  |  | 1,026 |
Deferred tax provision (benefit): |  |  |  |  |  |
Federal |  | (499) |  |  | 68 |  |  | (876) |
State |  | (31) |  |  | (15) |  |  | (114) |
Foreign |  | 29 |  |  | (98) |  |  | (7) |
Total |  | (501) |  |  | (45) |  |  | (997) |
Total provision for income taxes |  | $ | 1,015 |  |  | $ | 939 |  |  | $ | 29 |
The following is a reconciliation of our effective tax rate to the statutory federal tax rate:
|  | Fiscal Year
|  | 2023 |  | 2022 |  | 2021
Statutory tax rate |  | 21.0 | % |  | 21.0 | % |  | 21.0 | %
State, net of federal benefit |  | — |  |  | 0.2 |  |  | (0.8) |
Foreign income taxed at different rates |  | (17.3) |  |  | (19.1) |  |  | (22.8) |
Deemed inclusion of foreign earnings |  | 9.9 |  |  | 8.0 |  |  | 9.5 |
Foreign-derived intangible income deduction |  | — |  |  | — |  |  | (3.1) |
Uncertain tax benefits |  | (1.9) |  |  | 1.6 |  |  | 3.7 |
Excess tax benefits from stock-based compensation |  | (3.4) |  |  | (3.0) |  |  | (4.6) |
Research and development credit |  | (1.8) |  |  | (1.4) |  |  | (2.3) |
Other, net |  | 0.2 |  |  | 0.2 |  |  | (0.2) |
Effective tax rate on income before income taxes |  | 6.7 | % |  | 7.5 | % |  | 0.4 | %
The increase in provision for income taxes in fiscal year 2023 compared to fiscal year 2022 was primarily due to higher income before income taxes, partially offset by an increase in the recognition of uncertain tax benefits as a result of lapses of statutes of limitations. The increase in provision for income taxes in fiscal year 2022 compared to fiscal year 2021 was primarily due to higher income before income taxes. We derive the effective tax rate benefit attributed to foreign income taxed at different rates primarily from our operations in Singapore and Malaysia. Our tax incentives from the Singapore Economic Development Board provide that any qualifying income earned in Singapore is subject to tax incentives or reduced rates of Singapore income tax, subject to our compliance with the conditions specified in these incentives and legislative developments. These Singapore tax incentives are expected to expire in November 2025. We have also obtained a tax holiday from our qualifying income earned in Malaysia, which is scheduled to expire in fiscal year 2028. The tax holiday that we negotiated in Malaysia is also subject to our compliance with various operating and other conditions. Before taking into consideration the effects of the U.S. Tax Cuts and Jobs Act and other indirect tax impacts, the effect of these tax incentives and tax holiday decreased the provision for income taxes by approximately $2,104 million, $1,821 million and $1,156 million for fiscal years 2023, 2022 and 2021, respectively. Significant components of our deferred tax assets and liabilities consisted of the following:
|  | October 29, 2023 |  | October 30, 2022
|  | (In millions)
Deferred income tax assets: |  |  |  |
Net operating loss, credit and other carryforwards |  | $ | 1,809 |  |  | $ | 1,808 |
Capitalized research and development |  | 275 |  |  | — |
Deferred revenue |  | 208 |  |  | 645 |
Employee stock awards |  | 190 |  |  | 183 |
Depreciation and amortization |  | 223 |  |  | 156 |
Other deferred income tax assets |  | 329 |  |  | 343 |
Gross deferred income tax assets |  | 3,034 |  |  | 3,135 |
Less: valuation allowance |  | (1,789) |  |  | (1,777) |
Deferred income tax assets |  | 1,245 |  |  | 1,358 |
Deferred income tax liabilities: |  |  |  |
Depreciation and amortization |  | 97 |  |  | 341 |
Unamortized debt discount and issuance costs |  | 302 |  |  | 322 |
Foreign earnings not indefinitely reinvested |  | 86 |  |  | 86 |
Other deferred income tax liabilities |  | 62 |  |  | 36 |
Deferred income tax liabilities |  | 547 |  |  | 785 |
Net deferred income tax assets |  | $ | 698 |  |  | $ | 573 |
The 2017 Tax Act amended Internal Revenue Code Section 174 to require businesses to capitalize and amortize research and development expenses and became effective in our fiscal year 2023. In fiscal year 2023, we recorded a deferred tax asset of $275 million for capitalized research and development. We continue to indefinitely reinvest $1,963 million of certain accumulated foreign earnings. The unrecognized deferred income tax liability related to these earnings is estimated to be $206 million. All other current and future earnings of all our foreign subsidiaries are not considered permanently reinvested. As of October 29, 2023, we had tax effected U.S. state net operating loss (“NOL”) carryforwards of $136 million and foreign NOL carryforwards of $128 million. The state and foreign NOL carryforwards expire in various years beginning in fiscal years 2024 and 2025, respectively. We had $1,462 million of state research and development tax credits which begin to expire in fiscal year 2024. We have provided a valuation allowance on substantially all state tax credits and state and foreign net operating loss carryforwards as we do not expect them to be realized. Uncertain Tax Positions The following table reconciles the beginning and ending balance of gross unrecognized tax benefits:
|  | Fiscal Year
|  | 2023 |  | 2022 |  | 2021
|  | (In millions)
Beginning balance |  | $ | 5,117 |  |  | $ | 5,030 |  |  | $ | 4,748 |
Lapses of statutes of limitations |  | (634) |  |  | (50) |  |  | (58) |
Increases in balances related to tax positions taken during prior periods |  | 26 |  |  | — |  |  | 41 |
Decreases in balances related to tax positions taken during prior periods |  | (13) |  |  | (113) |  |  | — |
Increases in balances related to tax positions taken during current period |  | 170 |  |  | 288 |  |  | 337 |
Decreases in balances related to settlements with taxing authorities |  | (11) |  |  | (38) |  |  | (38) |
Ending balance |  | $ | 4,655 |  |  | $ | 5,117 |  |  | $ | 5,030 |
We recognize interest and penalties related to unrecognized tax benefits within the provision for income taxes. Accrued interest and penalties were included within other long-term liabilities. During fiscal years 2023, 2022 and 2021, we recognized interest and penalties of $22 million, $25 million and $46 million respectively, within the provision for income taxes. As of October 29, 2023 and October 30, 2022, the combined amount of cumulative accrued interest and penalties was approximately $389 million and $411 million, respectively. As of October 29, 2023 and October 30, 2022, approximately $5,044 million and $5,528 million, respectively, of the unrecognized tax benefits and accrued interest and penalties would, if recognized, benefit our effective income tax rate. We are subject to U.S. income tax examination for fiscal years 2018 and later. Certain of our acquired companies are subject to tax examinations in major jurisdictions outside of the U.S. for fiscal years 2008 and later. It is possible that our existing unrecognized tax benefits may change up to $499 million as a result of lapses of the statute of limitations for certain audit periods and/or audit examinations expected to be completed within the next 12 months.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI https://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI https://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
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