Income Taxes (Tables)

12 Months Ended

Jul. 28, 2018

The provision for income taxes consists of the following (in millions):



Years Ended	July 28, 2018			July 29, 2017			July 30, 2016
Federal:
Current	$	9,900		$	1,300		$	865
Deferred	1,156			(42		)	(93		)
	11,056			1,258			772
State:
Current	340			86			78
Deferred	(232		)	56			13
	108			142			91
Foreign:
Current	1,789			1,416			1,432
Deferred	(24		)	(138		)	(114		)
	1,765			1,278			1,318
Total	$	12,929		$	2,678		$	2,181

Income Before Provision for Income Taxes

Income before provision for income taxes consists of the following (in millions):



Years Ended	July 28, 2018		July 29, 2017		July 30, 2016
United States	$	3,765	$	2,393	$	2,907
International	9,274		9,894		10,013
Total	$	13,039	$	12,287	$	12,920

Difference Between Income Taxes at Federal Statutory Rate and Provision for Income Taxes

The items accounting for the difference between income taxes computed at the federal statutory rate and the provision for income taxes consist of the following:



Years Ended	July 28, 2018		July 29, 2017		July 30, 2016
Federal statutory rate	27.0	%	35.0	%	35.0	%
Effect of:
State taxes, net of federal tax benefit	0.6		1.1		0.5
Foreign income at other than U.S. rates	(5.2	)	(13.4	)	(14.5	)
Tax credits	(2.5	)	(1.2	)	(1.7	)
Domestic manufacturing deduction	(0.5	)	(0.4	)	(0.6	)
Stock-based compensation	(0.1	)	1.4		1.4
Tax audit settlement	—		—		(2.8	)
Impact of the Tax Act	80.1		—		—
Other, net	(0.2	)	(0.7	)	(0.4	)
Total	99.2	%	21.8	%	16.9	%

Aggregate Changes in Gross Unrecognized Tax Benefits

The aggregate changes in the balance of gross unrecognized tax benefits were as follows (in millions):



Years Ended	July 28, 2018			July 29, 2017			July 30, 2016
Beginning balance	$	1,973		$	1,627		$	2,029
Additions based on tax positions related to the current year	251			336			255
Additions for tax positions of prior years	84			180			116
Reductions for tax positions of prior years	(129		)	(78		)	(457		)
Settlements	(124		)	(43		)	(241		)
Lapse of statute of limitations	(55		)	(49		)	(75		)
Ending balance	$	2,000		$	1,973		$	1,627

Components of Deferred Tax Assets and Liabilities

The following table presents the breakdown for net deferred tax assets (in millions):



	July 28, 2018			July 29, 2017
Deferred tax assets	$	3,219		$	4,239
Deferred tax liabilities	(141		)	(271		)
Total net deferred tax assets	$	3,078		$	3,968

The following table presents the components of the deferred tax assets and liabilities (in millions):



	July 28, 2018			July 29, 2017
ASSETS
Allowance for doubtful accounts and returns	$	285		$	443
Sales-type and direct-financing leases	171			277
Inventory write-downs and capitalization	289			446
Investment provisions	54			171
IPR&D, goodwill, and purchased intangible assets	63			125
Deferred revenue	1,584			2,057
Credits and net operating loss carryforwards	1,087			976
Share-based compensation expense	190			273
Accrued compensation	370			504
Other	408			559
Gross deferred tax assets	4,501			5,831
Valuation allowance	(374		)	(244		)
Total deferred tax assets	4,127			5,587
LIABILITIES
Purchased intangible assets	(753		)	(1,037		)
Depreciation	(118		)	(340		)
Unrealized gains on investments	(33		)	(203		)
Other	(145		)	(39		)
Total deferred tax liabilities	(1,049		)	(1,619		)
Total net deferred tax assets	$	3,078		$	3,968