Income Taxes (Tables)

12 Months Ended

Apr. 26, 2019

The components of income before income taxes, based on tax jurisdiction, are as follows:

The income tax provision consists of the following:



	Fiscal Year
(in millions)	2019			2018			2017
Current tax expense:
U.S.	$	579		$	2,899		$	614
International	406			796			840
Total current tax expense	985			3,695			1,454
Deferred tax expense (benefit):
U.S.	(310		)	45			(399		)
International	(128		)	(1,160		)	(477		)
Net deferred tax benefit	(438		)	(1,115		)	(876		)
Income tax provision	$	547		$	2,580		$	578

Tax assets (liabilities), shown before jurisdictional netting of deferred tax assets (liabilities), are comprised of the following:



(in millions)	April 26, 2019			April 27, 2018
Deferred tax assets:
Net operating loss, capital loss, and credit carryforwards	$	6,574		$	7,463
Other accrued liabilities	389			410
Accrued compensation	315			209
Pension and post-retirement benefits	300			256
Stock-based compensation	162			190
Other	339			332
Inventory	194			207
Federal and state benefit on uncertain tax positions	83			67
Interest limitation	111			—
Unrealized loss on available-for-sale securities and derivative financial instruments	17			93
Gross deferred tax assets	8,484			9,227
Valuation allowance	(6,300		)	(7,166		)
Total deferred tax assets	2,184			2,061
Deferred tax liabilities:
Intangible assets	(1,614		)	(1,697		)
Realized loss on derivative financial instruments	(70		)	(69		)
Other	(152		)	(143		)
Accumulated depreciation	(38		)	(38		)
Outside basis difference of subsidiaries	(119		)	(131		)
Total deferred tax liabilities	(1,993		)	(2,078		)
Prepaid income taxes	363			406
Income tax receivables	335			315
Tax assets, net	$	889		$	704
Reported as (after valuation allowance and jurisdictional netting):
Other current assets	$	648		$	662
Tax assets	1,519			1,465
Deferred tax liabilities	(1,278		)	(1,423		)
Tax assets, net	$	889		$	704

The Company’s effective income tax rate varied from the U.S. federal statutory tax rate as follows:



	Fiscal Year
	2019		2018		2017
U.S. federal statutory tax rate	21.0	%	30.5	%	35.0	%
Increase (decrease) in tax rate resulting from:
U.S. state taxes, net of federal tax benefit	0.9		0.8		1.0
Research and development credit	(1.2	)	(0.8	)	(0.9	)
Puerto Rico Excise Tax	(1.6	)	(1.1	)	(1.5	)
International	(10.7	)	(18.9	)	(27.9	)
U.S. Tax Reform	0.2		43.0		—
Stock based compensation	(1.0	)	(1.0	)	—
Other, net	(0.2	)	3.0		(1.0	)
Divestiture related	—		(3.8	)	—
Certain tax adjustments	(1.0	)	(8.9	)	4.4
U.S. tax on foreign earnings	4.1		2.7		3.5
Effective tax rate	10.5	%	45.5	%	12.6	%

A reconciliation of the beginning and ending amount of unrecognized tax benefits for fiscal years 2019, 2018, and 2017 is as follows:



	Fiscal Year
(in millions)	2019			2018			2017
Gross unrecognized tax benefits at beginning of fiscal year	$	1,727		$	1,896		$	2,703
Gross increases:
Prior year tax positions	34			13			147
Current year tax positions	109			63			75
Acquisitions	—			—			4
Gross decreases:
Prior year tax positions	(14		)	(120		)	(538		)
Settlements	—			(80		)	(467		)
Statute of limitation lapses	(20		)	(45		)	(28		)
Gross unrecognized tax benefits at end of fiscal year	1,836			1,727			1,896
Cash advance paid to taxing authorities	(859		)	(859		)	—
Gross unrecognized tax benefits at end of fiscal year, net of cash advance	$	977		$	868		$	1,896

The major tax jurisdictions where the Company conducts business which remain subject to examination are as follows:



Jurisdiction		Earliest Year Open
United States - federal and state		1998
Brazil		2014
Canada		2011
China		2009
Costa Rica		2015
Dominican Republic		2016
Germany		2014
India		2002
Ireland		2012
Israel		2010
Italy		2005
Japan		2017
Luxembourg		2013
Mexico		2005
Puerto Rico		2011
Singapore		2013
Switzerland		2012
United Kingdom		2016