Income Taxes (Tables)

12 Months Ended

Apr. 24, 2020

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

The income tax (benefit) provision consists of the following:


	Fiscal Year
(in millions)	2020		2019		2018
Current tax expense:
U.S.	$	151	$	579	$	2,899
International	375		406		796
Total current tax expense	526		985		3,695
Deferred tax expense (benefit):
U.S.	(138)		(310)		45
International	(1,139)		(128)		(1,160)
Net deferred tax benefit	(1,277)		(438)		(1,115)
Income tax (benefit) provision	$	(751)	$	547	$	2,580

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


(in millions)	April 24, 2020		April 26, 2019
Deferred tax assets:
Net operating loss, capital loss, and credit carryforwards	$	6,432	$	6,574
Other accrued liabilities	390		389
Accrued compensation	285		315
Pension and post-retirement benefits	350		300
Stock-based compensation	136		162
Other	338		339
Inventory	191		194
Lease obligations	101		—
Federal and state benefit on uncertain tax positions	96		83
Interest limitation	236		111
Unrealized loss on available-for-sale securities and derivative financial instruments	—		17
Gross deferred tax assets	8,555		8,484
Valuation allowance	(5,482)		(6,300)
Total deferred tax assets	3,073		2,184
Deferred tax liabilities:
Intangible assets	(1,017)		(1,614)
Realized loss on derivative financial instruments	(65)		(70)
Other	(110)		(152)
Right of use leases	(97)		—
Unrealized gain on available-for-sale securities and derivative financial instruments	(12)		—
Accumulated depreciation	(87)		(38)
Outside basis difference of subsidiaries	(77)		(119)
Total deferred tax liabilities	(1,465)		(1,993)
Prepaid income taxes	449		363
Income tax receivables	381		335
Tax assets, net	$	2,438	$	889
Reported as (after valuation allowance and jurisdictional netting):
Other current assets	$	780	$	648
Tax assets	2,832		1,519
Deferred tax liabilities	(1,174)		(1,278)
Tax assets, net	$	2,438	$	889

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


	Fiscal Year
	2020		2019		2018
U.S. federal statutory tax rate	21.0	%	21.0	%	30.5	%
Increase (decrease) in tax rate resulting from:
U.S. state taxes, net of federal tax benefit	0.5		0.9		0.8
Research and development credit	(2.1)		(1.2)		(0.8)
Puerto Rico Excise Tax	(1.5)		(1.6)		(1.1)
International	(10.0)		(10.7)		(18.9)
U.S. Tax Reform	—		0.2		43.0
Stock based compensation	(1.5)		(1.0)		(1.0)
Other, net	0.4		(0.5)		1.6
Interest on uncertain tax positions	1.3		0.9		1.4
Base Erosion Anti-Abuse Tax	2.6		0.1		—
Foreign Derived Intangible Income Benefit	(1.2)		(0.6)		—
Divestiture-related	—		(0.4)		(3.8)
Certain tax adjustments	(30.8)		(0.6)		(8.9)
U.S. tax on foreign earnings	2.8		4.0		2.7
Effective tax rate	(18.5)	%	10.5	%	45.5	%

A reconciliation of the beginning and ending amount of unrecognized tax benefits for fiscal years 2020, 2019, and 2018 is as follows:


	Fiscal Year
(in millions)	2020		2019		2018
Gross unrecognized tax benefits at beginning of fiscal year	$	1,836	$	1,727	$	1,896
Gross increases:
Prior year tax positions	12		34		13
Current year tax positions	55		109		63

Gross decreases:
Prior year tax positions	(9)		(14)		(120)
Settlements	(5)		—		(80)
Statute of limitation lapses	(27)		(20)		(45)
Gross unrecognized tax benefits at end of fiscal year	1,862		1,836		1,727
Cash advance paid to taxing authorities	(859)		(859)		(859)
Gross unrecognized tax benefits at end of fiscal year, net of cash advance	$	1,003	$	977	$	868

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						2005
Australia						2016
Brazil						2015
Canada						2012
China						2009
Costa Rica						2016
Dominican Republic						2017
Germany						2014
India						2002
Ireland						2012
Israel						2010
Italy						2005
Japan						2017
Korea						2017
Luxembourg						2014
Mexico						2007
Puerto Rico						2011
Singapore						2013
Switzerland						2012
United Kingdom						2016