Income Taxes (Tables)

12 Months Ended

Jul. 01, 2016

Income Tax Disclosure [Abstract]

Domestic and Foreign Components of Income Before Income Taxes

The domestic and foreign components of income before income taxes were as follows for 2016, 2015 and 2014:

	2016			2015		2014
	(in millions)
Foreign	$	516		$	1,501	$	1,664
Domestic	(363		)	76		88
Income before income taxes	$	153		$	1,577	$	1,752

Components of Provision for Income Taxes

The components of the provision for income taxes were as follows for 2016, 2015 and 2014:

	2016			2015			2014
	(in millions)
Current:
Foreign	$	59		$	54		$	47
Domestic-federal	2			43			98
Domestic-state	(1		)	(13		)	3
Deferred:
Foreign	(39		)	12			(3		)
Domestic-federal	(109		)	11			(14		)
Domestic-state	(1		)	5			4
Income tax provision	$	(89	)	$	112		$	135

Deferred Tax Assets and Liabilities

Temporary differences and carryforwards, which give rise to a significant portion of deferred tax assets and liabilities as of July 1, 2016 and July 3, 2015 were as follows:

	July 1, 2016			July 3, 2015
	(in millions)
Deferred tax assets:
Sales related reserves and accrued expenses not currently deductible	$	82		$	50
Accrued compensation and benefits not currently deductible	207			138
Domestic net operating loss carryforward	259			137
Business credit carryforward	264			167
Long-lived assets	256			49
Other	177			65
Total deferred tax assets	1,245			606
Deferred tax liabilities:
Long-lived assets	(1,030		)	(126		)
Other	(9		)	(10		)
Total deferred tax liabilities	(1,039		)	(136		)
Valuation allowances	(294		)	(166		)
Deferred tax (liabilities) assets, net	$	(88	)	$	304

U.S. Federal Statutory Rate to Company's Effective Tax Rate

Reconciliation of the U.S. Federal statutory rate to the Company’s effective tax rate is as follows for 2016, 2015 and 2014:

	2016		2015		2014
U.S. Federal statutory rate	35	%	35	%	35	%
Tax rate differential on international income	(103	)	(29	)	(28	)
Tax effect of U.S. non-deductible convertible debt costs	13		—		—
Tax effect of U.S. non-deductible acquisition costs	10		—		—
Tax effect of U.S. foreign income inclusion	9		—		—
Tax effect of U.S. non-deductible share-based compensation	9		—		—
Tax effect of U.S. permanent differences	1		1		2
State income tax, net of federal tax	(1	)	—		—
Retroactive extension of Federal R&D credit	(9	)	—		—
Creditable foreign taxes	(13	)	—		—
Income tax credits	(14	)	(2	)	(1	)
Other	5		2		—
Effective tax rate	(58	)%	7	%	8	%

Total Amounts of Unrecognized Tax Benefits

The following is a tabular reconciliation of the total amounts of unrecognized tax benefits excluding accrued interest and penalties for 2016, 2015 and 2014:

	2016			2015			2014
	(in millions)
Unrecognized tax benefit at beginning of period	$	350		$	300		$	240
Gross increases related to current year tax positions	46			44			27
Gross increases related to prior year tax positions	6			6			26
Gross decreases related to prior year tax positions	(15		)	—			(5		)
Settlements	(8		)	—			—
Lapse of statute of limitations	(8		)	(3		)	—
Acquisitions	120			3			12
Unrecognized tax benefit at end of period	$	491		$	350		$	300