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Income Tax Expense (Tables)

12 Months Ended

Jul. 02, 2021

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:

			2021						2020						2019
			(in millions)
Foreign			$	218					$	(695)					$	(642)
Domestic			709						649						355
Income (loss) before taxes			$	927					$	(46)					$	(287)

Schedule of Components of Income Tax Expense (Benefit)

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

			2021						2020						2019
			(in millions)
Current:
Foreign			$	195					$	157					$	181
Domestic - Federal			154						124						(91)
Domestic - State			(1)						5						3
			348						286						93
Deferred:
Foreign			(20)						(29)						226
Domestic - Federal			(208)						(53)						141
Domestic - State			(14)						—						7
			(242)						(82)						374
Income tax expense			$	106					$	204					$	467

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:

			July 2, 2021						July 3, 2020
			(in millions)
Deferred tax assets:
Sales related reserves and accrued expenses not currently deductible			$	88					$	52
Accrued compensation and benefits not currently deductible			143						130
Deferred revenue			128						—
Net operating loss carryforward			196						251
Business credit carryforward			461						438
Long-lived assets			101						123
Other			131						133
Total deferred tax assets			1,248						1,127
Deferred tax liabilities:
Long-lived assets			(202)						(294)
Unremitted earnings of certain non-U.S. entities			(280)						(228)
Other			(20)						(26)
Total deferred tax liabilities			(502)						(548)
Valuation allowances			(558)						(624)
Deferred tax assets (liabilities), net			$	188					$	(45)

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:

			2021						2020						2019
U.S. Federal statutory rate			21		%				21		%				21		%
Tax rate differential on international income			8						(443)						(75)
Tax effect of U.S. foreign income inclusion			5						(38)						(7)
Tax effect of U.S. foreign minimum tax			1						(235)						(38)
Tax effect of U.S. foreign derived intangible income			(14)						109						11
Tax effect of U.S. non-deductible stock-based compensation			1						(21)						(1)
Tax effect of U.S. permanent differences			1						(26)						(3)
Impact of 2017 Act:
One-time mandatory deemed repatriation tax			—						—						(41)
Re-measurement of deferred taxes			—						—						2
Change in valuation allowance			(7)						(12)						(2)
Unremitted earnings of certain non-U.S. entities			6						(114)						(79)
Foreign income tax credits			(5)						191						23
R&D tax credits			(8)						147						24
Other			2						(22)						2
Effective tax rate			11		%				(443)		%				(163)		%

Summary of Operating Loss Carryforwards

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)			$	661					2022 to 2038
State NOL			369						2022 to 2038
Federal tax credits			56						2022 to 2034
State tax credits			648						No expiration

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)

Belgium

$

120

No expiration

Japan

111

2024 to 2031

Malaysia

72

2025 to 2027

Spain

51

No expiration

Netherlands

12

2025 to 2026

Summary of Income Tax Contingencies

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

			2021						2020						2019
			(in millions)
Unrecognized tax benefit, beginning balance			$	717					$	695					$	551
Gross increases related to current year tax positions			21						11						172
Gross increases related to prior year tax positions			46						35						8
Gross decreases related to prior year tax positions			(20)						(4)						(24)
Settlements			(9)						(12)						(1)
Lapse of statute of limitations			(7)						(8)						(11)
Acquisitions			—						—						—
Unrecognized tax benefit, ending balance			$	748					$	717					$	695

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