
	Fiscal Year
	2020		2019		2018

	(In millions)
Domestic loss	$	(4,221)	$	(4,116)	$	(705)
Foreign income	6,664		6,342		5,250
Income from continuing operations before income taxes	$	2,443	$	2,226	$	4,545

The benefit from income taxes in fiscal year 2020 was primarily due to jurisdictional mix of income and expense, the recognition of gross uncertain tax benefits as a result of lapses of statutes of limitations, the remeasurement of certain foreign deferred tax assets and liabilities, and excess tax benefits from stock-based awards.

The benefit from income taxes in fiscal year 2019 was primarily due to excess tax benefits from stock-based awards, the recognition of gross unrecognized tax benefits as a result of audit settlements and lapses of statutes of limitations net of increases in balances related to tax positions taken during the year, deferred tax remeasurement in state and foreign jurisdictions, internal reorganizations, and the partial release of our valuation allowance as a result of the CA Merger, partly offset by a change in estimate of our fiscal year 2018 provision resulting from regulations issued related to the U.S. Tax Cuts and Jobs Act (“2017 Tax Reform Act”).

The benefit from income taxes in the fiscal year 2018 was primarily due to income tax benefits recognized from the enactment of the 2017 Tax Reform Act and as a result of our redomiciliation to the United States on April 4, 2018.

We have obtained several tax incentives from the Singapore Economic Development Board which provide that qualifying income earned in Singapore is subject to tax incentives or reduced rates of Singapore income tax. Each tax incentive is separate and distinct from the others and may be granted, withheld, extended, modified, truncated, complied with, or terminated independently without any effect on the other incentives. Subject to our compliance with the conditions specified in these incentives and legislative developments, the Singapore tax incentive is scheduled to expire in November 2025.

We have also obtained a tax holiday on our qualifying income in Malaysia, which is scheduled to expire in fiscal year 2028. The tax holiday that we negotiated in Malaysia is also subject to our compliance with various operating and other conditions. If we cannot, or elect not to, comply with any such conditions specified, we will lose the related tax benefits and we could be required to refund previously realized material tax benefits.

Before taking into consideration the effects of the 2017 Tax Reform Act and other indirect tax impacts, the effect of these tax incentives and tax holiday was to increase the benefit from income taxes by approximately $833 million, $923 million and $590 million for fiscal years 2020, 2019 and 2018, respectively.


	Fiscal Year
	2020		2019		2018

	(In millions)
Current tax expense (benefit from):
Federal	$	7	$	(49)	$	255
State	51		(16)		38
Foreign	506		342		171
	564		277		464
Deferred tax expense (benefit from):
Federal	(627)		(497)		(8,666)
State	(161)		(113)		(103)
Foreign	(294)		(177)		221
	(1,082)		(787)		(8,548)
Total benefit from income taxes	$	(518)	$	(510)	$	(8,084)


	Fiscal Year
	2020		2019		2018
Statutory tax rate	21.0	%	21.0	%	21.0	%
State, net of federal benefit	(3.6)		(4.6)		(1.1)
2017 Tax Reform Act	—		5.1		(159.0)
Redomiciliation transaction withholding tax remeasurement	—		—		(25.6)
Foreign income taxed at different rates	(48.6)		(52.5)		(16.3)
Deemed inclusion of foreign earnings	21.8		25.9		4.7
Deferred taxes on unremitted foreign earnings	(1.1)		1.9		0.4
Excess tax benefits from stock-based compensation	(6.0)		(10.4)		(4.0)
Research and development credit	(4.3)		(7.6)		(2.9)

Other, net	(0.4)		(1.7)		4.9
Effective tax rate on income before income taxes	(21.2)	%	(22.9)	%	(177.9)	%


	November 1, 2020		November 3, 2019

	(In millions)
Deferred income tax assets:
Net operating loss, credit and other carryforwards	$	1,773	$	1,733
Deferred revenue	529		316
Employee stock awards	273		218
Other deferred income tax assets	392		313
Gross deferred income tax assets	2,967		2,580
Less: valuation allowance	(1,707)		(1,563)
Deferred income tax assets	1,260		1,017
Deferred income tax liabilities:
Depreciation and amortization	1,477		2,360
Foreign earnings not indefinitely reinvested	112		138
Deferred income tax liabilities	1,589		2,498

Net deferred income tax liabilities	$	(329)	$	(1,481)

Deferred income taxes reflect the net effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and their basis for income tax purposes and the tax effects of net operating losses and tax credit carryforwards. The decrease in net deferred income tax liabilities was primarily a result of the amortization of acquisition-related intangible assets included in the consolidated statement of operations.

In connection with the Symantec Asset Purchase in November 2019, we established $28 million of net deferred tax assets primarily as a result of the difference in book basis and tax basis related to acquired assets. In connection with the CA Merger in November 2018, we established $2,434 million of net deferred tax liabilities on the excess of the book basis over the tax basis of acquired identified intangible assets and investments in certain foreign subsidiaries that had not been indefinitely reinvested, partially offset by acquired tax attributes.

We continue to indefinitely reinvest $2,677 million of certain accumulated foreign earnings. The unrecognized deferred income tax liability related to these earnings is estimated to be $281 million. All other current and future earnings of all our foreign subsidiaries are not considered permanently reinvested.


	November 1, 2020		November 3, 2019

	(In millions)
Other long-term assets	$	240	$	50
Other long-term liabilities	(569)		(1,531)
Net long-term income tax liabilities	$	(329)	$	(1,481)

The increase in the valuation allowance to $1,707 million in fiscal year 2020 from $1,563 million in fiscal year 2019 was primarily due to federal and state deferred tax assets arising from credits and net operating loss carryforwards not expected to be realized.

As of November 1, 2020, we had U.S. federal net operating loss carryforwards of $67 million, U.S. state net operating loss carryforwards of $2,951 million and other foreign net operating loss carryforwards of $1,126 million. U.S. federal and state net operating loss carryforwards begin to expire in our fiscal year ending October 31, 2021 (“fiscal year 2021”). The other foreign net operating losses expire in various fiscal years beginning 2021. As of November 1, 2020, we had $301 million and $1,759 million of U.S. federal and state research and development tax credits, respectively, which if not utilized, begin to expire in fiscal year 2021.

The U.S. Tax Reform Act of 1986 limits the use of net operating loss and tax credit carryforwards in the case of an “ownership change” of a corporation or separate return loss year limitations. Any ownership changes, as defined, may restrict the utilization of carryforwards. As of November 1, 2020, we had approximately $67 million of federal net operating loss carryforwards in the U.S. subject to an annual limitation. We do not expect these limitations to result in any permanent loss of our tax benefits.

Gross unrecognized tax benefits increased by $326 million during fiscal year 2020, resulting in gross unrecognized tax benefits of $4,748 million as of November 1, 2020.

Gross unrecognized tax benefits increased by $392 million during fiscal year 2019, resulting in gross unrecognized tax benefits of $4,422 million as of November 3, 2019.

Gross unrecognized tax benefits increased by $1,774 million during fiscal year 2018, resulting in gross unrecognized tax benefits of $4,030 million as of November 4, 2018. The increase in gross unrecognized tax benefits was primarily due to the recognition of unrecognized tax positions of $1,112 million related to the transition tax on the mandatory deemed repatriation of accumulated non-U.S. earnings of U.S. controlled foreign corporations, offset by a reduction of our federal deferred income tax liabilities on accumulated non-U.S. earnings. The increase in gross unrecognized tax benefits was also as a result of our redomiciliation to the United States on April 4, 2018, and to a lesser extent, the Brocade Merger.

We recognize interest and penalties related to unrecognized tax benefits within the benefit from income taxes. Accrued interest and penalties were included within other long-term liabilities. During fiscal years 2020 and 2018, we recognized interest and penalties of $37 million and $59 million, respectively, within the benefit from income taxes. There was no amount recognized during fiscal year 2019. As of November 1, 2020 and November 3, 2019, the combined amount of cumulative accrued interest and penalties was approximately $340 million and $303 million, respectively.


	Fiscal Year
	2020		2019		2018

	(In millions)
Beginning balance	$	4,422	$	4,030	$	2,256
Lapses of statutes of limitations	(95)		(36)		(20)
Increases in balances related to tax positions taken during prior periods (including those related to acquisitions made during the year)	98		467		361
Decreases in balances related to tax positions taken during prior periods	(14)		(270)		(289)
Increases in balances related to tax positions taken during current period	379		460		1,726
Decreases in balances related to settlements with taxing authorities	(42)		(229)		(4)
Ending balance	$	4,748	$	4,422	$	4,030

A portion of our unrecognized tax benefits will affect our effective tax rate if they are recognized upon favorable resolution of the uncertain tax positions. As of November 1, 2020 and November 3, 2019, approximately $5,088 million and $4,725 million of the unrecognized tax benefits and accrued interest and penalties would affect our effective tax rate, respectively.

We are subject to U.S. income tax examination for fiscal years 2013 and later. Certain of our acquired companies are subject to tax examinations in major jurisdictions outside of the U.S. for fiscal years 2008 and later. It is possible that our existing unrecognized tax benefits may change up to $261 million as a result of lapses of the statute of limitations for certain audit periods and/or audit examinations expected to be completed within the next 12 months.