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Income Tax Expense (Tables)

12 Months Ended

Jun. 28, 2019

Income Tax Disclosure [Abstract]

Schedule of Income before Income Tax, Domestic and Foreign

The domestic and foreign components of Income (loss) before taxes were as follows:

	2019				2018				2017
	(in millions)
Foreign	$	(642	)		$	2,398			$	560
Domestic	355				(313		)		209
Income (loss) before taxes	$	(287	)		$	2,085			$	769

Schedule of Components of Income Tax Expense (Benefit)

The components of the income tax expense (benefit) were as follows:

	2019				2018				2017
	(in millions)
Current:
Foreign	$	181			$	166			$	127
Domestic - Federal	(91		)		1,597				229
Domestic - State	3				(5		)		4
	93				1,758				360
Deferred:
Foreign	226				(39		)		56
Domestic - Federal	141				(300		)		(44		)
Domestic - State	7				(9		)		—
	374				(348		)		12
Income tax expense	$	467			$	1,410			$	372

Schedule of Deferred Tax Assets and Liabilities

Temporary differences and carryforwards, which give rise to a significant portion of deferred tax assets and liabilities were as follows:

	June 28, 2019				June 29, 2018
	(in millions)
Deferred tax assets:
Sales related reserves and accrued expenses not currently deductible	$	48			$	53
Accrued compensation and benefits not currently deductible	124				145
Net operating loss carryforward	285				443
Business credit carryforward	410				448
Long-lived assets	144				161
Other	135				118
Total deferred tax assets	1,146				1,368
Deferred tax liabilities:
Long-lived assets	(413		)		(491		)
Unremitted earnings of certain non-U.S. entities	(220		)		(5		)
Other	(32		)		(43		)
Total deferred tax liabilities	(665		)		(539		)
Valuation allowances	(619		)		(614		)
Deferred tax assets (liabilities), net	$	(138	)		$	215

Schedule of Effective Income Tax Rate Reconciliation

Reconciliation of the U.S. Federal statutory rate to the Company’s effective tax rate is as follows:

	2019			2018			2017
U.S. Federal statutory rate	21	%		28	%		35	%
Tax rate differential on international income	(75	)		(34	)		(27	)
Tax effect of U.S. foreign income inclusion	(7	)		1			4
Tax effect of U.S. foreign minimum tax	(38	)		—			—
Tax effect of U.S. foreign derived intangible income	11			—			—
Tax effect of U.S. non-deductible stock-based compensation	(1	)		1			1
Tax effect of U.S. permanent differences	(3	)		(1	)		(1	)
State income tax, net of federal tax	—			—			1
Impact of 2017 Act:
One-time mandatory deemed repatriation tax	(41	)		75			—
Re-measurement of deferred taxes	2			(3	)		—
Change in valuation allowance	(2	)		5			29
Unremitted earnings of certain non-U.S. entities	(79	)		—			5
Tax related to SanDisk integration	—			—			12
Foreign income tax credits	23			—			—
Federal R&D credits	24			(4	)		(12	)
Other	2			—			1
Effective tax rate	(163	)%		68	%		48	%

Summary of Operating Loss Carryforwards

As of June 28, 2019, the Company had varying amounts of federal and state NOL/tax credit carryforwards that do not expire or, if not used, expire in various years. Following is a summary of the Company’s federal and state NOL/tax credit carryforwards and the related expiration dates of these NOL/tax credit carryforwards:

Jurisdiction	NOL/Tax Credit Carryforward Amount				Expiration
	(in millions)
Federal NOL (Pre 2017 Act Generation)	$	700			2021 to 2037
Federal NOL (Post 2017 Act Generation)	—				No expiration
State NOL	619				2021 to 2038
Federal tax credits	59				2020 to 2034
State tax credits	578				No expiration

As of June 28, 2019, the Company had varying amounts of foreign NOL carryforwards that do not expire or, if not used, expire in various years, depending on the country. The major jurisdictions that the Company receives foreign NOL carryforwards and the related amounts and expiration dates of these NOL carryforwards are as follows:

Jurisdiction		NOL Carryforward Amount				Expiration
		(in millions)
Japan		$	132			2024 to 2026
Belgium		105				No expiration
China		133				2023 to 2024
Spain		52				No expiration

Summary of Income Tax Contingencies

The following is a tabular reconciliation of the total amounts of unrecognized tax benefits excluding accrued interest and penalties:

	2019				2018				2017
	(in millions)
Unrecognized tax benefit, beginning balance	$	551			$	522			$	491
Gross increases related to current year tax positions	172				38				35
Gross increases related to prior year tax positions	8				30				3
Gross decreases related to prior year tax positions	(24		)		(9		)		(8		)
Settlements	(1		)		(19		)		(8		)
Lapse of statute of limitations	(11		)		(11		)		(19		)
Acquisitions	—				—				28
Unrecognized tax benefit, ending balance	$	695			$	551			$	522

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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.

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