Annual report pursuant to Section 13 and 15(d)

Income Taxes (Tables)

v3.22.0.1
Income Taxes (Tables)
 12 Months Ended
Dec. 25, 2021
Dec. 26, 2020
Income Tax Disclosure [Abstract]    
Schedule of Loss before Income Tax Income before income taxes consists of the following:
December 25, 2021 December 26, 2020 December 28, 2019
  (In millions)
U.S. $ 3,528  $ 1,213  $ 334 
Non-U.S. 147  67  38 
Total pre-tax income including equity income (loss) in investee $ 3,675  $ 1,280  $ 372 
 
Provision (Benefit) for Income Taxes The income tax provision (benefit) consists of:
December 25, 2021 December 26, 2020 December 28, 2019
  (In millions)
Current:
U.S. Federal $ 112  $ —  $ (13)
U.S. State and Local 11  5  1 
Non-U.S. 82  8  50 
Total 205  13  38 
Deferred:
U.S. Federal 320  (1,193) — 
U.S. State and Local (7) (28) — 
Non-U.S. (5) (2) (7)
Total 308  (1,223) (7)
Income tax provision (benefit) $ 513  $ (1,210) $ 31 
 
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).
December 25, 2021 December 26, 2020 December 28, 2019
  (In millions)
Statutory federal income tax expense at 21% $ 772  $ 269  $ 78 
State taxes (benefit) 1  (6) 1 
Foreign withholding taxes 7  10  22 
Foreign rate detriment / (benefit) 71  (3) 2 
Valuation allowance change 3  (1,301) (59)
Research credits (78) (57) — 
Excess tax benefits relating to share-based compensation (125) (116) — 
Tax Reform Act —  —  (13)
Foreign Derived Intangible Income deduction (147) —  — 
Other 9  (6) — 
Income tax provision (benefit) $ 513  $ (1,210) $ 31 
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 25, 2021 and December 26, 2020 were as follows:
December 25,
2021		 December 26,
2020
  (In millions)
Deferred tax assets:
Net operating loss carryovers $ 920  $ 1,029 
Accruals and reserves not currently deductible 631  514 
Employee benefits not currently deductible 164  122 
Federal and state tax credit carryovers 319  569 
Foreign research and development ITC credits 547  489 
Capitalized costs 121  174 
Lease liability 124  72 
Other 27  29 
Total deferred tax assets 2,853  2,998 
Less: valuation allowance (1,735) (1,576)
Total deferred tax assets, net of valuation allowance 1,118  1,422 
Deferred tax liabilities:
Acquired intangibles and goodwill (50) (1)
Right-of-use assets (110) (62)
Discount of convertible notes —  (2)
Undistributed foreign earnings (24) (114)
Other (15) (9)
Total deferred tax liabilities (199) (188)
Net deferred tax assets $ 919  $ 1,234 
The movement in the deferred tax valuation allowance was as follows:
December 25, 2021 December 26, 2020 December 28, 2019
  (In millions)
Balance at beginning of year $ 1,576  $ 2,867  $ 2,443 
Charges (reductions) to income tax expense/other accounts* 3  (1,301) (61)
Net (deductions) recoveries+
156  10  485 
Balance at end of year $ 1,735  $ 1,576  $ 2,867 
*
Amounts recorded against other accounts are not material
+ The 2019 and 2021 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 25, 2021 and December 26, 2020 is as follows:
December 25,
2021		 December 26,
2020
  (In millions)
Deferred tax assets $ 931  $ 1,245 
Deferred tax liabilities (12) (11)
Net deferred tax assets $ 919  $ 1,234 
 
Schedule of Unrecognized Tax Benefits Roll Forward A reconciliation of the Company's gross unrecognized tax benefits was as follows:
December 25, 2021 December 26, 2020 December 28, 2019
  (In millions)
Balance at beginning of year $ 119  $ 65  $ 49 
Increases for tax positions taken in prior years 14  41  5 
Decreases for tax positions taken in prior years (9) (15) — 
Increases for tax positions taken in the current year 156  30  15 
Decreases for settlements with taxing authorities (5) (1) (3)
Decreases for lapsing of the statute of limitations —  (1) (1)
Balance at end of year $ 275  $ 119  $ 65