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Income Taxes
 12 Months Ended
Nov. 29, 2024
Income Tax Disclosure [Abstract]  
INCOME TAXES INCOME TAXES
Income before income taxes for fiscal 2024, 2023 and 2022 consisted of the following:
(in millions)
202420232022
Domestic$4,160 $3,465 $1,958 
Foreign2,771 3,334 4,050 
Income before income taxes$6,931 $6,799 $6,008 
The provision for income taxes for fiscal 2024, 2023 and 2022 consisted of the following:
(in millions)
202420232022
Current:   
United States federal$1,292 $1,198 $465 
Foreign315 335 329 
State and local232 260 132 
Total current1,839 1,793 926 
Deferred:   
United States federal(580)(556)(45)
Foreign179 227 360 
State and local(67)(93)11 
Total deferred(468)(422)326 
Provision for income taxes
$1,371 $1,371 $1,252 
Reconciliation of Provision for Income Taxes
Total income tax expense differed from the income tax expense computed at the U.S. federal statutory rate of 21% as a result of the following:
(in millions)
202420232022
Tax expense computed at U.S. federal statutory rate$1,456 $1,428 $1,262 
Effects of non-U.S. operations(198)(116)(7)
Tax credits(150)(130)(116)
Tax settlements(85)(14)(14)
Stock-based compensation(23)29 — 
Acquisition termination fee
210 — — 
State tax expense, net of federal benefit139 132 113 
Other22 42 14 
Provision for income taxes
$1,371 $1,371 $1,252 
Deferred Tax Assets and Liabilities
The tax effects of the temporary differences that gave rise to significant portions of the deferred tax assets and liabilities as of November 29, 2024 and December 1, 2023 were as follows:
(in millions)
20242023
Deferred tax assets:  
Capitalized expenses$1,625 $984 
Credit carryforwards343 366 
Net operating loss and capital loss carryforwards
308 44 
Intangible assets117 320 
Reserves and accruals129 125 
Operating lease liabilities79 97 
Stock-based compensation66 65 
Benefits relating to tax positions64 68 
Other34 48 
Total gross deferred tax assets2,765 2,117 
Valuation allowance(725)(405)
Total deferred tax assets2,040 1,712 
Deferred tax liabilities:
Acquired intangible assets180 263 
Prepaid expenses112 107 
Depreciation and amortization70 77 
Operating lease right-of-use assets52 89 
Total deferred tax liabilities414 536 
Net deferred tax assets$1,626 $1,176 
Deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities, and for tax loss and credit carryforwards.
As of November 29, 2024, we had federal and state tax credit carryforwards of approximately $93 million and $308 million, respectively, as well as state net operating loss carryforwards of approximately $408 million. We also had federal and state capital loss carryforwards of $1.15 billion mainly from the Figma acquisition termination fee which was not deductible for financial statement purposes. The majority of the state tax credits can be carried forward indefinitely, and the remaining federal and state tax loss and credit carryforwards will expire in various years from fiscal 2025 through 2040. Certain tax loss and credit carryforwards are subject to an annual limitation and/or are reduced by a valuation allowance. The net carrying amount of such assets is expected to be fully realized.
In assessing the realizability of deferred tax assets, management determined that it is more likely than not that we will not fully realize certain available tax assets in domestic and foreign jurisdictions. Deferred tax assets are offset by a valuation allowance to the extent it is more likely than not that they are not expected to be realized. As of November 29, 2024, we continue to maintain a valuation allowance of $725 million primarily related to certain state credits and federal capital loss carryforwards. For fiscal 2024, the increase in the valuation allowance was $321 million, mainly related to the capital loss generated from the Figma acquisition termination fee.
As we repatriate foreign earnings for use in the United States, the distributions will generally be exempt from federal income taxes. As of November 29, 2024, the cumulative amount of foreign earnings considered permanently reinvested upon which taxes have not been provided, and the corresponding unrecognized deferred tax liability, was not material.
Accounting for Uncertainty in Income Taxes
During fiscal 2024 and 2023, the aggregate changes in our total gross amount of unrecognized tax benefits were as follows:
(in millions)
20242023
Beginning balance$501 $321 
Gross increases in unrecognized tax benefits – prior year tax positions6 103 
Gross decreases in unrecognized tax benefits – prior year tax positions(10)(9)
Gross increases in unrecognized tax benefits – current year tax positions269 108 
Lapse of statute of limitations(63)(14)
Tax settlements(20)(13)
Foreign exchange gains and losses— 5 
Ending balance$683 $501 
Our policy is to record interest and penalties related to uncertain tax positions within the provision for income taxes. As of November 29, 2024 and December 1, 2023, the combined amounts of accrued interest and penalties included in long-term income taxes payable related to tax positions taken on our tax returns were not material.
While we file federal, state and local income tax returns globally, our major tax jurisdictions are Ireland, California and the United States. We are subject to the examination of our income tax returns by various domestic and foreign tax authorities with 2020 being the earliest fiscal year open for examination in all of our major tax jurisdictions. We regularly assess the likelihood of outcomes resulting from examinations to determine the adequacy of our provision for income taxes and have reserved for potential adjustments that may result. While we believe our tax estimates are reasonable, we cannot provide assurance that the final determination of any of these examinations will not have an adverse effect on our financial position and results of operations.
The timing of the resolution of income tax examinations is highly uncertain as are the amounts and timing of tax payments that are part of any audit settlement process. These events could cause large fluctuations in the balance sheet classification of our tax assets and liabilities. We believe that within the next 12 months, it is reasonably possible that either certain audits will conclude or statutes of limitations on certain income tax examination periods will expire, or both. Although the timing of resolution, settlement and closing of audits is not certain, it is reasonably possible that the underlying unrecognized tax benefits may decrease by up to $50 million over the next 12 months.