Annual report pursuant to Section 13 and 15(d)

Income Taxes (Tables)

v3.20.4
Income Taxes (Tables)
 12 Months Ended
Dec. 26, 2020
Dec. 28, 2019
Income Tax Disclosure [Abstract]    
Schedule of Loss before Income Tax
Income before income taxes consists of the following:
2020 2019 2018
  (In millions)
U.S. $ 1,213  $ 334  $ 114 
Non-U.S. 67  38  214 
Total pre-tax income including equity income (loss) in investee $ 1,280  $ 372  $ 328 
 
Provision (Benefit) for Income Taxes
The income tax provision (benefit) consists of:
2020 2019 2018
  (In millions)
Current:
U.S. Federal $ —  $ (13) $ 12 
U.S. State and Local 5  1  — 
Non-U.S. 8  50  (17)
Total 13  38  (5)
Deferred:
U.S. Federal (1,193) —  — 
U.S. State and Local (28) —  — 
Non-U.S. (2) (7) (4)
Total (1,223) (7) (4)
Income tax provision (benefit) $ (1,210) $ 31  $ (9)
 
Schedule of Effective Income Tax Rate Reconciliation  
The table below displays the reconciliation between statutory federal income taxes and the total income tax provision (benefit).
2020 2019 2018
  (In millions)
Statutory federal income tax expense at 21% $ 269  $ 78  $ 69 
State taxes (6) 1  1 
Foreign withholding taxes (refund) 10  22  (29)
Foreign rate detriment / (benefit) (3) 2  2 
Valuation allowance change (1,301) (59) (64)
Research credits (57) —  (1)
Excess tax benefits relating to share-based compensation (116) —  — 
Tax Reform Act —  (13) 13 
Other (6) —  — 
Income tax provision (benefit) $ (1,210) $ 31  $ (9)
Schedule of Deferred Tax Assets and Liabilities
Deferred income taxes reflect the net tax effects of tax carryovers and temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the balances for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities as of December 26, 2020 and December 28, 2019 were as follows:
December 26,
2020		 December 28,
2019
  (In millions)
Deferred tax assets:
Net operating loss carryovers $ 1,029  $ 1,357 
Accruals and reserves not currently deductible 514  257 
Acquired intangibles and goodwill —  50 
Federal and state tax credit carryovers 569  584 
Foreign research and development ITC credits 489  429 
Capitalized costs 174  232 
Lease liability 72  57 
Other 149  105 
Total deferred tax assets 2,996  3,071 
Less: valuation allowance (1,576) (2,867)
Total deferred tax assets, net of valuation allowance 1,420  204 
Deferred tax liabilities:
Right-of-use assets (62) (49)
Discount of convertible notes (2) (16)
Undistributed foreign earnings (114) (111)
Other (8) (17)
Total deferred tax liabilities (186) (193)
Net deferred tax assets $ 1,234  $ 11 
The movement in the deferred tax valuation allowance was as follows:
2020 2019 2018
  (In millions)
Balance at beginning of year $ 2,867  $ 2,443  $ 2,621 
Charges (reductions) to income tax expense/other accounts* (1,301) (61) (59)
Net (deductions) recoveries+
10  485  (119)
Balance at end of year $ 1,576  $ 2,867  $ 2,443 
*
Amounts recorded against other accounts are not material
+ The 2019 and 2020 net recoveries were primarily related to net originating deferred tax assets and newly generated tax credits
Deferred tax liabilities are included in Other long-term liabilities on the consolidated balance sheets. The breakdown between deferred tax assets and deferred tax liabilities as of December 26, 2020 and December 28, 2019 is as follows:
December 26,
2020		 December 28,
2019
  (In millions)
Deferred tax assets $ 1,245  $ 22 
Deferred tax liabilities (11) (11)
Net deferred tax assets $ 1,234  $ 11 
 
Schedule of Unrecognized Tax Benefits Roll Forward
A reconciliation of the Company's gross unrecognized tax benefits was as follows:
2020 2019 2018
  (In millions)
Balance at beginning of year $ 65  $ 49  $ 49 
Increases for tax positions taken in prior years 41  5  1 
Decreases for tax positions taken in prior years (15) —  (1)
Increases for tax positions taken in the current year 30  15  3 
Decreases for settlements with taxing authorities (1) (3) (2)
Decreases for lapsing of the statute of limitations (1) (1) (1)
Balance at end of year $ 119  $ 65  $ 49