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Income Taxes | 12 Months Ended
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Aug. 29, 2024
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes Our income tax (provision) benefit consisted of the following:
For the year ended | 2024 | 2023 | 2022
Income (loss) before income taxes and equity in net income (loss) of equity method investees |  |  |
U.S. | $ | 544 |  | $ | 235 |  | $ | 112 |
Foreign | 696 |  | (5,893) |  | 9,459 |
| $ | 1,240 |  | $ | (5,658) |  | $ | 9,571 |
Income tax (provision) benefit |  |  |
Current |  |  |
U.S. federal | $ | (82) |  | $ | (5) |  | $ | (65) |
State | (1) |  | (1) |  | (1) |
Foreign | (333) |  | (178) |  | (528) |
| (416) |  | (184) |  | (594) |
Deferred |  |  |
U.S. federal | 18 |  | (84) |  | (166) |
State | — |  | — |  | (225) |
Foreign | (53) |  | 91 |  | 97 |
| (35) |  | 7 |  | (294) |
Income tax (provision) benefit | $ | (451) |  | $ | (177) |  | $ | (888) |
The table below reconciles our tax (provision) benefit based on the U.S. federal statutory rate to our effective rate:
For the year ended | 2024 | 2023 | 2022
U.S. federal income tax (provision) benefit at statutory rate | $ | (260) |  | 21.0 | % | $ | 1,188 |  | 21.0 | % | $ | (2,010) |  | 21.0 | %
U.S. tax on foreign operations | (7) |  | 0.6 |  | 6 |  | 0.1 |  | (322) |  | 3.4 |
Change in valuation allowance | (59) |  | 4.8 |  | (50) |  | (0.9) |  | (241) |  | 2.5 |
Change in unrecognized tax benefits | (41) |  | 3.3 |  | (30) |  | (0.5) |  | (67) |  | 0.7 |
Foreign tax rate differential | (214) |  | 17.2 |  | (1,285) |  | (22.8) |  | 1,601 |  | (16.7) |
Research and development tax credits | 76 |  | (6.1) |  | 43 |  | 0.8 |  | 66 |  | (0.7) |
State taxes, net of federal benefit | 12 |  | (1.0) |  | 37 |  | 0.7 |  | — |  | — |
Other | 42 |  | (3.4) |  | (86) |  | (1.5) |  | 85 |  | (0.9) |
Income tax (provision) benefit | $ | (451) |  | 36.4 | % | $ | (177) |  | (3.1) | % | $ | (888) |  | 9.3 | %
We operate in a number of jurisdictions outside the United States, including Singapore, where we have tax incentive arrangements. These incentives expire, in whole or in part, at various dates through 2034 and are conditional, in part, upon meeting certain business operations and employment thresholds. As a result of low level of profitability and geographic mix of income, the benefit from tax incentive arrangements was not material for 2024 or 2023. These arrangements reduced our tax provision by $1.12 billion ($1.00 per diluted share) for 2022. As of August 29, 2024, certain non-U.S. subsidiaries had cumulative undistributed earnings of $4.12 billion that were deemed to be indefinitely reinvested. A provision has not been recognized to the extent that distributions from such subsidiaries are subject to additional foreign withholding or state income tax. Determination of the amount of unrecognized deferred tax liabilities related to investments in these foreign subsidiaries is not practicable. Deferred income taxes reflect the net tax effects of temporary differences between the bases of assets and liabilities for financial reporting and income tax purposes as well as carryforwards. Deferred tax assets and liabilities consist of the following:
As of | August 29, 2024 | August 31, 2023
Deferred tax assets |  |
Net operating loss and tax credit carryforwards | $ | 1,050 |  | $ | 1,112 |
Accrued salaries, wages, and benefits | 182 |  | 39 |
Operating lease liabilities | 175 |  | 135 |
Inventories | 4 |  | 52 |
Other | 59 |  | 75 |
Gross deferred tax assets | 1,470 |  | 1,413 |
Less valuation allowance | (593) |  | (528) |
Deferred tax assets, net of valuation allowance | 877 |  | 885 |
Deferred tax liabilities |  |
Right-of-use assets | (152) |  | (115) |
Property, plant, and equipment | (194) |  | (31) |
Other | (70) |  | (100) |
Deferred tax liabilities | (416) |  | (246) |
Net deferred tax assets | $ | 461 |  | $ | 639 |
Reported as |  |
Deferred tax assets | $ | 520 |  | $ | 756 |
Deferred tax liabilities (included in other noncurrent liabilities) | (59) |  | (117) |
Net deferred tax assets | $ | 461 |  | $ | 639 |
We assess positive and negative evidence for each jurisdiction to determine whether it is more likely than not that existing deferred tax assets will be realized. As of August 29, 2024, and August 31, 2023, we had a valuation allowance of $593 million and $528 million, respectively, against our net deferred tax assets, primarily related to carryforwards in U.S. states and Malaysia. Changes in 2024 in the valuation allowance were due to adjustments based on management's assessment of the realizability of tax credits, allowances and net operating losses based on a level that is more likely than not to be realized. As of August 29, 2024, our net operating loss carryforward amounts and expiration periods, as reported to tax authorities, were as follows:
Year of Expiration | Malaysia | Singapore | State | Japan | Other | Total
2025 - 2029 | $ | — |  | $ | — |  | $ | 47 |  | $ | 144 |  | $ | 3 |  | $ | 194 |
2030 - 2034 | — |  | — |  | 298 |  | 325 |  | 126 |  | 749 |
2035 - 2039 | — |  | — |  | 285 |  | — |  | — |  | 285 |
2040 - 2044 | — |  | — |  | 94 |  | — |  | — |  | 94 |
Indefinite | 1,224 |  | 765 |  | — |  | — |  | — |  | 1,989 |
| $ | 1,224 |  | $ | 765 |  | $ | 724 |  | $ | 469 |  | $ | 129 |  | $ | 3,311 |
As of August 29, 2024, our tax credit carryforward amounts and expiration periods, as reported to tax authorities, were as follows:
Year of Tax Credit Expiration | U.S. Federal | State | Other | Total
2025 - 2029 | $ | — |  | $ | 61 |  | $ | — |  | $ | 61 |
2030 - 2034 | 47 |  | 134 |  | 2 |  | 183 |
2035 - 2039 | 48 |  | 140 |  | 44 |  | 232 |
2040 - 2045 | 315 |  | 6 |  | — |  | 321 |
Indefinite | — |  | 145 |  | — |  | 145 |
| $ | 410 |  | $ | 486 |  | $ | 46 |  | $ | 942 |
Below is a reconciliation of the beginning and ending amount of our unrecognized tax benefits:
For the year ended | 2024 | 2023 | 2022
Beginning unrecognized tax benefits | $ | 744 |  | $ | 731 |  | $ | 660 |
Increases related to tax positions from prior years | 2 |  | 2 |  | 14 |
Increases related to prior year tax positions taken in current year | 20 |  | 27 |  | — |
Increases related to tax positions taken in current year | 54 |  | 17 |  | 80 |
Decreases related to tax positions from prior years | (89) |  | (33) |  | (23) |
Decreases related to settlement with tax authorities | (15) |  | — |  | — |
Ending unrecognized tax benefits | $ | 716 |  | $ | 744 |  | $ | 731 |
As of August 29, 2024, gross unrecognized tax benefits were $716 million, which would have an impact of approximately $633 million on our effective tax rate in the future, if recognized. Amounts accrued for interest and penalties related to uncertain tax positions were not significant for any period presented. The resolution of tax audits or expiration of statute of limitations could also reduce our unrecognized tax benefits. Although the timing of final resolution is uncertain, the estimated potential reduction in our unrecognized tax benefits in the next 12 months would not be significant. We and our subsidiaries file income tax returns with the U.S. federal government, various U.S. states, and various foreign jurisdictions throughout the world. We regularly engage in discussions and negotiations with tax authorities regarding tax matters, including transfer pricing, and we continue to defend any and all such claims presented. Our U.S. federal and state tax returns remain open to examination for 2018 through 2024. We are currently under audit by the Internal Revenue Service for our 2018 and 2019 tax years. In addition, tax returns that remain open to examination in Singapore, Taiwan and Japan range from the years 2016 to 2024. We believe that adequate amounts of taxes and related interest and penalties have been provided, and any adjustments as a result of examinations are not expected to materially adversely affect our business, results of operations, or financial condition.

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