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Income Taxes | 12 Months Ended
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Apr. 01, 2022
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes The components of our income (loss) from continuing operations before income taxes are as follows:
| Year Ended
(In millions) | April 1, 2022 |  | April 2, 2021 |  | April 3, 2020
Domestic | $ | 791 |  |  | $ | 607 |  |  | $ | 667 |
International | 251 |  |  | 265 |  |  | 152 |
Income (loss) before income taxes | $ | 1,042 |  |  | $ | 872 |  |  | $ | 819 |
The components of income tax expense (benefit) from continuing operations are as follows:
| Year Ended
(In millions) | April 1, 2022 |  | April 2, 2021 |  | April 3, 2020
Current: |  |  |  |  |
Federal | $ | 217 |  |  | $ | 133 |  |  | $ | 208 |
State | 50 |  |  | 36 |  |  | 33 |
International | 20 |  |  | (13) |  |  | 3 |
Total | 287 |  |  | 156 |  |  | 244 |
Deferred: |  |  |  |  |
Federal | (42) |  |  | (6) |  |  | (23) |
State | (6) |  |  | (5) |  |  | 3 |
International | (33) |  |  | 31 |  |  | 17 |
Total | (81) |  |  | 20 |  |  | (3) |
Income tax expense | $ | 206 |  |  | $ | 176 |  |  | $ | 241 |
The U.S. federal statutory income tax rates we have applied for fiscal 2022, 2021 and 2020 are as follows:
| Year Ended
| April 1, 2022 |  | April 2, 2021 |  | April 3, 2020
U.S. federal statutory income tax rate | 21.0 | % |  | 21.0 | % |  | 21.0 | %
The difference between our effective income tax and the federal statutory income tax is as follows:
| Year Ended
(In millions) | April 1, 2022 |  | April 2, 2021 |  | April 3, 2020
Federal statutory tax expense (benefit) | $ | 219 |  |  | $ | 183 |  |  | $ | 172 |
State taxes, net of federal benefit | 33 |  |  | 25 |  |  | 22 |
Foreign earnings taxed at other than the federal rate | (47) |  |  | (10) |  |  | (2) |
Federal research and development credit | (4) |  |  | (1) |  |  | (2) |
Valuation allowance increase (decrease) | 2 |  |  | 1 |  |  | (57) |
Change in uncertain tax positions | 11 |  |  | 3 |  |  | 60 |
Stock-based compensation | 7 |  |  | 5 |  |  | 5 |
Nondeductible goodwill | — |  |  | — |  |  | 18 |
Favorable ruling on foreign withholding tax | — |  |  | (35) |  |  | — |
US tax on foreign earnings | 12 |  |  | (15) |  |  | (4) |
Return to provision adjustment | (8) |  |  | 1 |  |  | 12 |
Other, net | — |  |  | 2 |  |  | 17 |
Irish FX remeasurement | (19) |  |  | 17 |  |  | — |
Income tax expense | $ | 206 |  |  | $ | 176 |  |  | $ | 241 |
The principal components of deferred tax assets and liabilities are as follows:
(In millions) | April 1, 2022 |  | April 2, 2021
Deferred tax assets: |  |  |
Tax credit carryforwards | $ | 7 |  |  | $ | 2 |
Net operating loss carryforwards of acquired companies | 16 |  |  | 23 |
Other accruals and reserves not currently tax deductible | 84 |  |  | 54 |
Operating lease liabilities | 28 |  |  | 29 |
Property and equipment | 13 |  |  | 17 |
Intangible assets | 123 |  |  | 103 |
Stock-based compensation | 8 |  |  | 7 |
Other | 54 |  |  | 36 |
Gross deferred tax assets | 333 |  |  | 271 |
Valuation allowance | (11) |  |  | (7) |
Deferred tax assets, net of valuation allowance | 322 |  |  | 264 |
Deferred tax liabilities: |  |  |
Operating lease assets | (21) |  |  | (25) |
Goodwill | (6) |  |  | (1) |
Deferred revenue | (2) |  |  | (1) |
Unremitted earnings of foreign subsidiaries | (16) |  |  | (15) |
Prepaids and deferred expenses | (1) |  |  | (2) |
Discount on convertible debt | — |  |  | (2) |
Deferred tax liabilities | (46) |  |  | (46) |
Net deferred tax assets (liabilities) | $ | 276 |  |  | $ | 218 |
Deferred income taxes reflect the net effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and their basis for income tax purposes and the tax effects of net operating losses and tax credit carryforwards. The valuation allowance provided against our deferred tax assets as of April 1, 2022, increased primarily due to a valuation allowance on capital loss carryforwards. The ending valuation allowance of $11 million is provided primarily against tax attributes. As of April 1, 2022, we have U.S. federal net operating losses attributable to various acquired companies of approximately $52 million, which, if not used, will expire between fiscal 2023 and 2039. The net operating loss carryforwards are subject to an annual limitation under U.S. federal tax regulations but are expected to be fully realized. Furthermore, we have U.S. state net operating loss carryforwards attributable to various acquired companies of approximately $12 million. If not used, our U.S. state net operating losses will expire between fiscal 2023 and 2038. In addition, we have foreign net operating loss carryforwards attributable to various foreign companies of approximately $14 million. In assessing the ability to realize our deferred tax assets, we considered whether it is more likely than not that some portion or all the deferred tax assets will not be realized. We considered the following: we have historical cumulative book income, as measured by the current and prior two years; we have strong, consistent taxpaying history; and we have substantial amounts of scheduled future reversals of taxable temporary differences from our deferred tax liabilities. We have concluded that this positive evidence outweighs the negative evidence and, thus, that the deferred tax assets as of April 1, 2022, are realizable on a “more likely than not” basis. The aggregate changes in the balance of gross unrecognized tax benefits were as follows:
| Year Ended
(In millions) | April 1, 2022 |  | April 2, 2021 |  | April 3, 2020
Balance at beginning of year | $ | 548 |  |  | $ | 724 |  |  | $ | 446 |
Settlements with tax authorities | — |  |  | (37) |  |  | (5) |
Lapse of statute of limitations | (34) |  |  | (34) |  |  | (15) |
Increase related to prior period tax positions | 16 |  |  | 13 |  |  | 77 |
Decrease related to prior period tax positions | (11) |  |  | (129) |  |  | (11) |
Increase related to current year tax positions | 8 |  |  | 11 |  |  | 232 |
Balance at end of year | $ | 527 |  |  | $ | 548 |  |  | $ | 724 |
There was a change of $21 million in gross unrecognized tax benefits during the year ended April 1, 2022, as disclosed above. This gross liability does not include offsetting tax benefits associated with the correlative effects of potential transfer pricing adjustments, interest deductions and state income taxes. Of the total unrecognized tax benefits at April 1, 2022, $486 million, if recognized, would affect our effective tax rate. We recognize interest and/or penalties related to uncertain tax positions in income tax expense. At April 1, 2022, before any tax benefits, we had $87 million of accrued interest and penalties on unrecognized tax benefits. Interest included in our provision for income taxes was an expense of approximately $19 million for fiscal 2022. If the accrued interest and penalties do not ultimately become payable, amounts accrued will be reduced in the period that such determination is made and reflected as a reduction of the overall income tax provision. We file income tax returns in the U.S. on a federal basis and in many U.S. state and foreign jurisdictions. Our most significant tax jurisdictions are the U.S. and Ireland. Our tax filings remain subject to examination by applicable tax authorities for a certain length of time following the tax year to which those filings relate. Our fiscal years 2014 through 2021 remain subject to examination by the IRS for U.S. federal tax purposes and fiscal years 2014 through 2020 are under audit. Our 2017 through 2021 fiscal years remain subject to examination by the appropriate governmental agencies for Irish tax purposes. The timing of the resolution of income tax examinations is highly uncertain, and the amounts ultimately paid, if any, upon resolution of the issues raised by the taxing authorities may differ materially from the amounts accrued for each year. Although potential resolution of uncertain tax positions involves multiple tax periods and jurisdictions, it is reasonably possible that the gross unrecognized tax benefits related to these audits could decrease (whether by payment, release, or a combination of both) in the next 12 months. Depending on the nature of the settlement or expiration of statutes of limitations, it could affect our income tax provision and therefore benefit the resulting effective tax rate. We continue to monitor the progress of ongoing income tax controversies and the impact, if any, of the expected tolling of the statute of limitations in various taxing jurisdictions.

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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/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI https://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI https://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
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