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Income Taxes | 12 Months Ended
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Jun. 25, 2017
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes The components of income (loss) before income taxes were as follows:
| Year Ended
| June 25, 2017 |  | June 26, 2016 |  | June 28, 2015
| (in thousands)
United States | $ | 7,553 |  |  | $ | (113,607 | ) |  | $ | 72,728 |
Foreign | 1,804,120 |  |  | 1,073,724 |  |  | 668,122 |
| $ | 1,811,673 |  |  | $ | 960,117 |  |  | $ | 740,850 |
Significant components of the provision for income taxes attributable to income before income taxes were as follows:
| Year Ended
| June 25, 2017 |  | June 26, 2016 |  | June 28, 2015
| (in thousands)
Federal: |  |  |  |  |
Current | $ | (70,858 | ) |  | $ | 1,426 |  |  | $ | 16,795 |
Deferred | 99,700 |  |  | (38,616 | ) |  | 12,115 |
| 28,842 |  |  | (37,190 | ) |  | 28,910 |
State: |  |  |  |  |
Current | (963 | ) |  | 2,892 |  |  | 1,376 |
Deferred | (2,246 | ) |  | (7,600 | ) |  | 158 |
| (3,209 | ) |  | (4,708 | ) |  | 1,534 |
Foreign: |  |  |  |  |
Current | 85,479 |  |  | 90,752 |  |  | 61,551 |
Deferred | 2,798 |  |  | (2,786 | ) |  | (6,722 | )
| 88,277 |  |  | 87,966 |  |  | 54,829 |
Total provision for income taxes | $ | 113,910 |  |  | $ | 46,068 |  |  | $ | 85,273 |
Deferred income taxes reflect the net tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes, as well as the tax effect of carryforwards. Significant components of the Company’s net deferred tax assets and liabilities were as follows:
| June 25, 2017 |  | June 26, 2016
| (in thousands)
Deferred tax assets: |  |  |
Tax carryforwards | $ | 175,595 |  |  | $ | 176,767 |
Allowances and reserves | 170,752 |  |  | 128,416 |
Equity-based compensation | 25,828 |  |  | 29,414 |
Inventory valuation differences | 19,602 |  |  | 17,178 |
Prepaid cost sharing | 133,831 |  |  | 88,522 |
Other | 20,175 |  |  | 24,540 |
Gross deferred tax assets | 545,783 |  |  | 464,837 |
Valuation allowance | (114,011 | ) |  | (101,689 | )
Net deferred tax assets | 431,772 |  |  | 363,148 |
Deferred tax liabilities: |  |  |
Intangible assets | (30,944 | ) |  | (46,774 | )
Convertible debt | (153,047 | ) |  | (151,483 | )
Capital assets | (72,727 | ) |  | (61,845 | )
Amortization of goodwill | (15,582 | ) |  | (14,176 | )
Unremitted earnings of foreign subsidiaries | (302,663 | ) |  | (146,459 | )
Other | (9,844 | ) |  | (8,594 | )
Gross deferred tax liabilities | (584,807 | ) |  | (429,331 | )
Net deferred tax liabilities | $ | (153,035 | ) |  | $ | (66,183 | )
The change in the gross deferred tax assets, gross deferred tax liabilities, and valuation allowance between fiscal years 2017 and 2016 is primarily due to an increase related to allowances and reserves and an increase in deferred tax liabilities related to an accrual for future tax liabilities due to the expected repatriation of earnings of certain foreign subsidiaries. Realization of the Company’s net deferred tax assets is based upon the weighting of available evidence, including such factors as the recent earnings history and expected future taxable income. The Company believes it is more-likely-than-not that such deferred tax assets will be realized with the exception of $114.0 million primarily related to California, certain state, and certain foreign deferred tax assets. The provisions related to the tax accounting for equity-based compensation prohibit the recognition of a deferred tax asset for an excess benefit that has not yet been realized. As a result, the Company will only recognize an excess benefit from equity-based compensation in additional paid-in-capital if an incremental tax benefit is realized after all other tax attributes currently available to us have been utilized. In addition, the Company continued to elect to account for the indirect benefits of equity-based compensation such as the research and development tax credit through the Consolidated Statement of Operations. At June 25, 2017, the Company had federal net operating loss carryforwards of approximately $109.0 million. The majority of these losses will begin to expire in fiscal year 2019, and are subject to limitations on their utilization. At June 25, 2017, the Company had state net operating loss carryforwards of approximately $85.4 million. If not utilized, the net operating loss carryforwards will begin to expire in fiscal year 2020 and are subject to limitations on their utilization. At June 25, 2017, the Company had federal tax credit carryforwards of approximately $236.2 million, of which $33.2 million of foreign tax credit will begin to expire in fiscal year 2018 and $201.2 million of research and development tax credit will begin to expire in fiscal year 2030. The remaining balance of $1.8 million of alternative minimum tax credit may be carried forward indefinitely. At June 25, 2017, the Company had state tax credit carryforwards of approximately $296.0 million. Substantially all state tax credit carryforwards can be carried forward indefinitely. At June 25, 2017, the Company had foreign net operating loss carryforwards of approximately $9.4 million, which will begin to expire in fiscal year 2018. A reconciliation of income tax expense provided at the federal statutory rate (35% in fiscal years 2017, 2016, and 2015) to actual income tax expense is as follows:
| Year Ended
| June 25, 2017 |  | June 26, 2016 |  | June 28, 2015
| (in thousands)
Income tax expense computed at federal statutory rate | $ | 634,086 |  |  | $ | 336,041 |  |  | $ | 259,297 |
State income taxes, net of federal tax benefit | (11,973 | ) |  | (14,070 | ) |  | (8,611 | )
Foreign income taxed at different rates | (352,860 | ) |  | (265,123 | ) |  | (175,581 | )
Settlements and reductions in uncertain tax positions | (144,519 | ) |  | — |  |  | — |
Tax credits | (37,713 | ) |  | (48,277 | ) |  | (24,416 | )
State valuation allowance, net of federal tax benefit | 12,070 |  |  | 17,948 |  |  | 8,594 |
Equity-based compensation | 13,187 |  |  | 12,366 |  |  | 28,845 |
Other permanent differences and miscellaneous items | 1,632 |  |  | 7,183 |  |  | (2,855 | )
| $ | 113,910 |  |  | $ | 46,068 |  |  | $ | 85,273 |
Effective from fiscal year 2014 through June 2023, the Company has a 10-year tax ruling in Switzerland for one of its foreign subsidiaries. The impact of the tax ruling decreased taxes by approximately $6.3 million, $4.3 million, and $4.8 million for fiscal years 2017, 2016, and 2015, respectively. The benefit of the tax ruling on diluted earnings per share was approximately $0.03 in fiscal year 2017, $0.02 in fiscal year 2016, and $0.03 in fiscal year 2015. Earnings of the Company’s foreign subsidiaries included in consolidated retained earnings that are indefinitely reinvested in foreign operations aggregated to approximately $5.4 billion at June 25, 2017. If these earnings were remitted to the United States, they would be subject to U.S. and foreign withholding taxes of approximately $1.6 billion at current statutory rates. The Company’s federal income tax provision includes U.S. income taxes on certain foreign-based income. As of June 25, 2017, the total gross unrecognized tax benefits were $339.4 million compared to $417.4 million as of June 26, 2016, and $363.6 million as of June 28, 2015. During fiscal year 2017, gross unrecognized tax benefits decreased by approximately $78.0 million. The amount of unrecognized tax benefits that, if recognized, would impact the effective tax rate was $247.6 million, $323.4 million, and $276.8 million, as of June 25, 2017, June 26, 2016, and June 28, 2015, respectively. The aggregate changes in the balance of gross unrecognized tax benefits were as follows:
| (in thousands)
Balance as of June 29, 2014 | $ | 352,112 |
Settlements and effective settlements with tax authorities | (2,108 | )
Lapse of statute of limitations | (9,376 | )
Increases in balances related to tax positions taken during prior periods | 3,729 |
Decreases in balances related to tax positions taken during prior periods | (12,615 | )
Increases in balances related to tax positions taken during current period | 31,810 |
Balance as of June 28, 2015 | 363,552 |
Lapse of statute of limitations | (10,992 | )
Increases in balances related to tax positions taken during prior periods | 18,200 |
Decreases in balances related to tax positions taken during prior periods | (421 | )
Increases in balances related to tax positions taken during current period | 47,093 |
Balance as of June 26, 2016 | 417,432 |
Settlements and effective settlements with tax authorities | (6,691 | )
Lapse of statute of limitations | (113,491 | )
Increases in balances related to tax positions taken during prior periods | 6,557 |
Decreases in balances related to tax positions taken during prior periods | (11,528 | )
Increases in balances related to tax positions taken during current period | 47,168 |
Balance as of June 25, 2017 | $ | 339,447 |
The Company recognizes interest expense and penalties related to the above unrecognized tax benefits within income tax expense. The Company had accrued $15.7 million, $42.4 million, and $35.5 million cumulatively for gross interest and penalties as of June 25, 2017, June 26, 2016, and June 28, 2015, respectively. The Company is subject to audits by state and foreign tax authorities. The Company is unable to make a reasonable estimate as to when cash settlements, if any, with the relevant taxing authorities will occur. The Company files U.S. federal, U.S. state, and foreign income tax returns. As of June 25, 2017, tax years 2004-2016 remain subject to examination in the jurisdictions where the Company operates. The Company is in various stages of examinations in connection with all of its tax audits worldwide, and it is difficult to determine when these examinations will be settled. It is reasonably possible that over the next 12-month period the Company may experience an increase or decrease in its unrecognized tax benefits as a result of tax examinations or lapses of statute of limitations. The change in unrecognized tax benefits is not expected to be material.

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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/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32559-109319 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32718-109319 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32639-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32537-109319 + Details
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