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Income Taxes
 12 Months Ended
Oct. 27, 2024
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The components of income before income taxes for each fiscal year were as follows:
 
202420232022
 (In millions)
U.S.$833 $1,234 $1,171 
Foreign7,319 6,482 6,428 
Total$8,152 $7,716 $7,599 
The components of the provision for income taxes for each fiscal year were as follows:
202420232022
 (In millions)
Current:
U.S.$1,254 $708 $590 
Foreign366 456 275 
State33 54 14 
1,653 1,218 879 
Deferred:
U.S.(697)(255)(62)
Foreign30 (61)265 
State(11)(42)(8)
(678)(358)195 
Total$975 $860 $1,074 
A reconciliation between the statutory U.S. federal income tax rate and our actual effective income tax rate for each fiscal year is presented below:
 
202420232022
Tax provision at U.S. statutory rate21.0 %21.0 %21.0 %
Effect of foreign operations taxed at various rates(7.6)(8.2)(4.4)
Changes in prior years’ unrecognized tax benefits
— (0.2)(0.9)
Resolutions of prior years’ income tax filings
(0.1)(0.1)(0.2)
Research and other tax credits(1.4)(1.6)(1.0)
Other0.1 0.2 (0.4)
Total12.0 %11.1 %14.1 %
Our provision for income taxes and effective tax rate are affected by the geographical composition of pre-tax income which includes jurisdictions with differing tax rates, conditional reduced tax rates and other income tax incentives. It is also affected by events that vary from period to period, such as changes in income tax laws and the resolution of prior years’ income tax filings.
Our effective tax rate for fiscal 2024 was higher than fiscal 2023 primarily due to lower tax credits in fiscal 2024, partially offset by higher proportion of pre-tax income in lower tax jurisdictions in fiscal 2024. Our effective tax rate for fiscal 2023 was lower than fiscal 2022 primarily due to a reduction of deferred tax assets that occurred in fiscal 2022, related to a new tax incentive in Singapore.
In the reconciliation between the statutory U.S. federal income tax rate and the effective income tax rate, the effect of foreign operations taxed at various rates represents the difference between an income tax provision at the U.S. federal statutory income tax rate and the recorded income tax provision, with the difference expressed as a percentage of worldwide income before income taxes. This effect is substantially related to the tax effect of pre-tax income in jurisdictions with lower statutory tax rates. The foreign operations with the most significant effective tax rate impact are in Singapore. The statutory tax rate for fiscal 2024 for Singapore is 17%. We have been granted conditional reduced tax rates that expire beginning in fiscal 2025, excluding potential renewal and subject to certain conditions with which we expect to comply. The tax benefits arising from these tax rates were $393 million or $0.47 per diluted share and $369 million or $0.44 per diluted share and $232 million or $0.26 per diluted share for fiscal 2024, 2023 and 2022, respectively.
Deferred tax assets and liabilities are recognized for the estimated future tax effects of temporary differences between the book and tax bases of assets and liabilities. Deferred tax assets are also recognized for net operating loss and tax credit carryovers. Deferred tax assets are offset by a valuation allowance to the extent it is more likely than not that they are not expected to be realized. The components of deferred income tax assets and liabilities were as follows: 
October 27,
2024		October 29,
2023
 (In millions)
Deferred tax assets:
Corporate Alternative Minimum Tax$410 $— 
Capitalized R&D expenses217 83 
Allowance for doubtful accounts4 4 
Inventory reserves and basis difference127 125 
Installation and warranty reserves70 35 
Intangible assets977 1,031 
Accrued liabilities24 19 
Deferred revenue72 72 
Tax credits592 536 
Deferred compensation261 217 
Share-based compensation44 50 
Property, plant and equipment101 9 
Lease liability72 98 
Other79 96 
Gross deferred tax assets3,050 2,375 
Valuation allowance(569)(530)
Total deferred tax assets2,481 1,845 
Deferred tax liabilities:
Right of use assets(76)(103)
Undistributed foreign earnings(23)(23)
Total deferred tax liabilities(99)(126)
Net deferred tax assets$2,382 $1,719 
A valuation allowance is recorded to reflect the estimated amount of net deferred tax assets that may not be realized. Changes in the valuation allowance in each fiscal year were as follows:
202420232022
(In millions)
Beginning balance$530 $460 $361 
Increases39 70 99 
Ending balance$569 $530 $460 
At October 27, 2024, we have state research and development tax credit carryforwards of $592 million, including $553 million of credits that are carried over until exhausted and $35 million that are carried over for 15 years and begin to expire in fiscal 2034. It is more likely than not that all tax credit carryforwards, net of valuation allowance, will be utilized.
We maintain liabilities for uncertain tax positions. These liabilities involve considerable judgment and estimation and are continuously monitored based on the best information available. Gross unrecognized tax benefits are classified as non-current income taxes payable or as a reduction in deferred tax assets. A reconciliation of the beginning and ending balances of gross unrecognized tax benefits in each fiscal year is as follows: 
202420232022
 (In millions)
Beginning balance of gross unrecognized tax benefits$510 $498 $537 
Settlements with tax authorities— — (25)
Increases in tax positions for current year25 28 26 
Increases in tax positions for prior years13 — 28 
Decreases in tax positions for prior years(4)(16)(68)
Ending balance of gross unrecognized tax benefits$544 $510 $498 
Tax expense for interest and penalties on unrecognized tax benefits for fiscal 2024, 2023 and 2022 was $45 million, $34 million and $14 million, respectively. The income tax liability for interest and penalties for fiscal 2024, 2023 and 2022 was $181 million, $136 million and $103 million, respectively, and was classified as non-current income taxes payable.
Included in the balance of unrecognized tax benefits for fiscal 2024, 2023 and 2022 are $397 million, $386 million, and $388 million, respectively, of tax benefits that, if recognized, would affect the effective tax rate.
Our tax returns remain subject to examination by taxing authorities. These include U.S. returns for fiscal 2015 and later years, and foreign tax returns for fiscal 2011 and later years.
The timing of the resolution of income tax examinations, as well as the amounts and timing of various tax payments that may be part of the settlement process, is highly uncertain. This could cause fluctuations in our financial condition and results of operations. We continue to have ongoing negotiations with various taxing authorities throughout the year, and evaluate all domestic and foreign tax audit issues in the aggregate, along with the expiration of applicable statutes of limitations.
We believe it is reasonably possible that the amount of gross unrecognized tax benefits related to foreign operations could be reduced by approximately $200 million in the next 12 months as a result of the resolution of tax matters or the lapse of statute of limitations.