Income Tax Expense (Benefit) (Tables)

12 Months Ended

Jun. 29, 2018

Income Tax Disclosure [Abstract]

Domestic and Foreign Components of Income Before Income Taxes

The domestic and foreign components of income before taxes were as follows:

	2018			2017		2016
	(in millions)
Foreign	$	2,398		$	560	$	516
Domestic	(313		)	209		(363		)
Income before taxes	$	2,085		$	769	$	153

Components of Provision for Income Taxes

The components of the income tax expense (benefit) were as follows:

	2018			2017			2016
	(in millions)
Current:
Foreign	$	166		$	127		$	59
Domestic - Federal	1,597			229			2
Domestic - State	(5		)	4			(1		)
	1,758			360			60
Deferred:
Foreign	(39		)	56			(39		)
Domestic - Federal	(300		)	(44		)	(109		)
Domestic - State	(9		)	—			(1		)
	(348		)	12			(149		)
Income tax expense (benefit)	$	1,410		$	372		$	(89	)

Deferred Tax Assets and Liabilities

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

	June 29, 2018			June 30, 2017
	(in millions)
Deferred tax assets:
Sales related reserves and accrued expenses not currently deductible	$	53		$	84
Accrued compensation and benefits not currently deductible	145			252
Net operating loss carryforward	443			292
Business credit carryforward	448			283
Long-lived assets	161			236
Other	118			141
Total deferred tax assets	1,368			1,288
Deferred tax liabilities:
Long-lived assets	(491		)	(874		)
Unremitted earnings of certain non-U.S. entities	(5		)	(38		)
Other	(43		)	(11		)
Total deferred tax liabilities	(539		)	(923		)
Valuation allowances	(614		)	(518		)
Deferred tax assets (liabilities), net	$	215		$	(153	)

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:

	2018		2017		2016
U.S. Federal statutory rate	28	%	35	%	35	%
Tax rate differential on international income	(34	)	(27	)	(103	)
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	1		4		9
Tax effect of U.S. non-deductible stock-based compensation	1		1		9
Tax effect of U.S. permanent differences	(1	)	(1	)	1
State income tax, net of federal tax	—		1		(1	)
Impact of 2017 Act:
One-time mandatory deemed repatriation tax	75		—		—
Re-measurement of deferred taxes	(3	)	—		—
Change in valuation allowance	5		29		16
Unremitted earnings of certain non-U.S. entities	—		5		—
Tax related to SanDisk integration	—		12		—
Retroactive extension of Federal R&D credit	—		—		(9	)
Income tax credits	(4	)	(12	)	(43	)
Other	—		1		5
Effective tax rate	68	%	48	%	(58	)%

Summary of Operating Loss Carryforwards

The Company had varying amounts of foreign NOL carryforwards that do not expire or, if not used, expire in various years, depending on the country. The major jurisdictions that the Company receives foreign NOL carryforwards and the related amounts and expiration dates of these NOL carryforwards are as follows:

Jurisdiction	NOL Carryforward Amount		Expiration
	(in millions)
Japan	$	141	2024 to 2026
Belgium	86		No expiration
China	129		2023 to 2024
Malaysia	117		No expiration
Spain	56		No expiration

As of June 29, 2018, the Company had varying amounts of federal and state NOL/tax credit carryforwards that do not expire or, if not used, expire in various years. Following is a summary of the Company’s federal and state NOL/tax credit carryforwards and the related expiration dates of these NOL/tax credit carryforwards:

Jurisdiction	NOL/Tax Credit Carryforward Amount		Expiration
	(in millions)
Federal NOL (Pre 2017 Act Generation)	$	766	2020 to 2037
Federal NOL (Post 2017 Act Generation)	704		No expiration
State NOL	850		2022 to 2038
Federal tax credits	155		2019 to 2038
State tax credits	550		No expiration

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:

	2018			2017			2016
	(in millions)
Unrecognized tax benefit, beginning balance	$	522		$	491		$	350
Gross increases related to current year tax positions	38			35			46
Gross increases related to prior year tax positions	30			3			6
Gross decreases related to prior year tax positions	(9		)	(8		)	(15		)
Settlements	(19		)	(8		)	(8		)
Lapse of statute of limitations	(11		)	(19		)	(8		)
Acquisitions	—			28			120
Unrecognized tax benefit, ending balance	$	551		$	522		$	491