Income Tax Expense (Tables)

12 Months Ended

Jul. 01, 2022

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:

	2022		2021		2020
	(in millions)
Foreign	$	1,384	$	218	$	(695)
Domestic	739		709		649
Income (loss) before taxes	$	2,123	$	927	$	(46)

Schedule of Components of Income Tax Expense (Benefit)

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

	2022		2021		2020
	(in millions)
Current:
Foreign	$	143	$	195	$	157
Domestic - Federal	341		154		124
Domestic - State	25		(1)		5
	509		348		286
Deferred:
Foreign	27		(20)		(29)
Domestic - Federal	84		(208)		(53)
Domestic - State	3		(14)		—
	114		(242)		(82)
Income tax expense	$	623	$	106	$	204

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 1, 2022		July 2, 2021
	(in millions)
Deferred tax assets:
Sales related reserves and accrued expenses not currently deductible	$	71	$	88
Accrued compensation and benefits not currently deductible	114		143
Deferred revenue	—		128
Net operating loss carryforward	195		196
Business credit carryforward	483		461
Long-lived assets	72		101
Other	178		131
Total deferred tax assets	1,113		1,248
Deferred tax liabilities:
Long-lived assets	(128)		(202)
Unremitted earnings of certain non-U.S. entities	(288)		(280)
Other	(17)		(20)
Total deferred tax liabilities	(433)		(502)
Valuation allowances	(580)		(558)
Deferred tax assets, net	$	100	$	188

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:

	2022		2021		2020
U.S. Federal statutory rate	21	%	21	%	21	%
Tax rate differential on international income	(9)		8		(443)
Tax effect of U.S. foreign income inclusion	—		5		(38)
Tax effect of U.S. foreign minimum tax	5		1		(235)
Tax effect of U.S. foreign derived intangible income	(1)		(14)		109
Tax effect of U.S. non-deductible stock-based compensation	1		1		(21)
Tax effect of U.S. permanent differences	—		1		(26)
IRS Tentative Settlement	15		—		—
Change in valuation allowance	1		(7)		(12)
Unremitted earnings of certain non-U.S. entities	1		6		(114)
Foreign income tax credits	(3)		(5)		191
R&D tax credits	(4)		(8)		147
Other	2		2		(22)
Effective tax rate	29	%	11	%	(443)	%

Schedule 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)	$	627	2023 to 2038
State NOL	364		2031 to 2038
Federal tax credits	57		2023 to 2043
State tax credits	691		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)
Malaysia	$	122	2025 to 2028
Belgium	106		No expiration
Japan	84		2024 to 2031
Spain	46		No expiration
Netherlands	12		2025 to 2026

Schedule of Income Tax Contingencies

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

	2022		2021		2020
	(in millions)
Unrecognized tax benefit, beginning balance	$	748	$	717	$	695
Gross increases related to current year tax positions	12		21		11
Gross increases related to prior year tax positions	358		46		35
Gross decreases related to prior year tax positions	(65)		(20)		(4)
Settlements	(1)		(9)		(12)
Lapse of statute of limitations	(5)		(7)		(8)
Unrecognized tax benefit, ending balance	$	1,047	$	748	$	717