Advanced Micro Devices, Inc. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Income Taxes (Tables)

Income Taxes (Tables)

12 Months Ended

Dec. 29, 2018

The provision (benefit) for income taxes consists of:



	2018			2017 ⁽¹⁾			2016 ⁽¹⁾
	(In millions)
Current:
U.S. Federal	$	12		$	(3	)	$	(2	)
U.S. State and Local	—			—			—
Foreign National and Local	(17		)	37			21
Total	(5		)	34			19
Deferred:
U.S. Federal	—			(15		)	(1		)
Foreign National and Local	(4		)	(1		)	21
Total	(4		)	(16		)	20
Provision (benefit) for income taxes	$	(9	)	$	18		$	39

⁽¹⁾ Prior year amounts adjusted to reflect the retrospective application of ASU 2014-09, Revenue from Contracts with Customers. Refer to Note 2.

Schedule of Loss before Income Tax

Income (loss) before income taxes consists of the following:



	2018		2017			2016
	(In millions)
U.S.	$	114	$	53		$	(609	)
Foreign	214		(68		)	150
Total pre-tax income (loss) including equity loss in investee	$	328	$	(15	)	$	(459	)

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 29, 2018 and December 30, 2017 are as follows:



	December 29, 2018			December 30, 2017 ⁽¹⁾
	(In millions)
Deferred tax assets:
Net operating loss carryovers	$	1,533		$	1,551
Inventory valuation	25			20
Accrued expenses not currently deductible	98			61
Acquired intangibles	76			102
Tax deductible goodwill	25			56
Federal and state tax credit carryovers	527			546
Foreign research and development ITC credits	370			391
Other	89			62
Total deferred tax assets	2,743			2,789
Less: valuation allowance	(2,580		)	(2,621		)
Total deferred tax assets, net of valuation allowance	163			168
Deferred tax liabilities:
Discount of convertible notes	(54		)	(58		)
Undistributed foreign earnings	(94		)	(97		)
Other	(11		)	(13		)
Total deferred tax liabilities	(159		)	(168		)
Net deferred tax assets	$	4		$	—

⁽¹⁾ Prior year amounts adjusted to reflect the retrospective application of ASU 2014-09, Revenue from Contracts with Customers. Refer to Note 2.

Schedule of Deferred Tax Assets and Liabilities, Current and Noncurrent

The breakdown between deferred tax assets and deferred tax liabilities as of December 29, 2018 and December 30, 2017 is as follows:



	December 29, 2018			December 30, 2017 ⁽¹⁾
	(In millions)
Deferred tax assets	$	15		$	11
Deferred tax liabilities	(11		)	(11		)
Net deferred tax assets	$	4		$	—

⁽¹⁾ Prior year amounts adjusted to reflect the retrospective application of ASU 2014-09, Revenue from Contracts with Customers. Refer to Note 2.

Summary of Tax Attribute Carryforwards

The following is a summary of the Company’s various tax attribute carryforwards as of December 29, 2018.



Carryforward	Federal		State / Provincial		Expiration
	(In millions)
U.S.-net operating loss carryovers	$	7,140	$	317	2018 to 2037
U.S.-credit carryovers	$	372	$	219	2018 to 2037
Canada-net operating loss carryovers	$	17	$	17	2027 to 2028
Canada-credit carryovers	$	338	$	28	2023 to 2037
Other foreign net operating loss carryovers	$	44	N/A		various

Schedule of Effective Income Tax Rate Reconciliation

The table below displays the reconciliation between statutory federal income taxes and the total provision (benefit) for income taxes.



	2018			2017			2016
	(In millions)
Statutory federal income tax expense (benefit) at 21%, 35% and 35% rate	$	69		$	22		$	(160	)
State taxes, net of federal benefit	1			1			1
Foreign (income) expense at other than U.S. rates	2			—			(1		)
U.S. valuation allowance generated (utilized)	(93		)	15			201
Credit monetization	(1		)	(20		)	(2		)
Tax Reform Act taxes	13			—			—
Provision (benefit) for income taxes	$	(9	)	$	18		$	39

Schedule of Unrecognized Tax Benefits Roll Forward

A reconciliation of the Company's gross unrecognized tax benefits is as follows:



	2018			2017 ⁽¹⁾			2016 ⁽¹⁾
	(In millions)
Balance at beginning of year	$	49		$	42		$	38
Increases for tax positions taken in prior years	1			7			3
Decreases for tax positions taken in prior years	(1		)	(2		)	—
Increases for tax positions taken in the current year	3			3			2
Decreases for settlements with taxing authorities	(2		)	—			—
Decreases for lapsing of the statute of limitations	(1		)	(1		)	(1		)
Balance at end of year	$	49		$	49		$	42

⁽¹⁾ Prior year amounts adjusted to reflect the retrospective application of ASU 2014-09, Revenue from Contracts with Customers. Refer to Note 2.