Income Taxes

9 Months Ended

May 28, 2020

Our income tax (provision) benefit consisted of the following:


	Quarter ended						Nine months ended
	May 28, 2020		May 30, 2019		May 28, 2020		May 30, 2019

Income tax (provision) benefit, excluding items below	$	(30)	$	125	$	(60)	$	(469)
Utilization of and other changes in net deferred tax assets of MMJ, MMT, and MTTW	(38)		(32)		(84)		(162)
Repatriation tax, net of adjustments related to uncertain tax positions	—		42		—		9
	$	(68)	$	135	$	(144)	$	(622)

Income tax provision in the third quarter of 2020 increased as compared to the third quarter of 2019 primarily due to tax benefits in the third quarter of 2019 resulting from tax law changes. Our provision for income tax decreased in the first nine months of 2020 as compared to the first nine months of 2019 primarily as a result of reductions in our profit before tax and the foreign minimum tax.

As of May 28, 2020, gross unrecognized tax benefits related to uncertain tax positions were $396 million, substantially all of which would affect our effective tax rate in the future, if recognized. Amounts accrued for interest and penalties related to uncertain tax positions were not significant for any period presented.

We operate in a number of jurisdictions outside the United States, including Singapore, where we have tax incentive arrangements. These arrangements expire in whole or in part at various dates through 2034 and are conditional, in part, upon meeting certain business operations and employment thresholds. The effect of tax incentive arrangements reduced our tax provision by $70 million (benefiting our diluted earnings per share by $0.06) and $78 million ($0.07 per diluted share) for the third quarter and first nine months of 2020, respectively, and by $71 million ($0.06 per diluted share) and $742 million ($0.65 per diluted share) for the third quarter and first nine months of 2019, respectively.