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Income Taxes (Tables)

12 Months Ended

Oct. 30, 2022

Schedule of Income before Income Tax, Domestic and Foreign


	Fiscal Year
	2022		2021		2020

	(In millions)
Domestic loss	$	(2,020)	$	(3,103)	$	(4,221)
Foreign income	14,454		9,868		6,664
Income from continuing operations before income taxes	$	12,434	$	6,765	$	2,443

Schedule of Components of Income Tax Expense (Benefit)

The components of the provision for and benefit from income taxes were as follows:


	Fiscal Year
	2022		2021		2020

	(In millions)
Current tax expense:
Federal	$	174	$	446	$	7
State	48		46		51
Foreign	762		534		506
Total	984		1,026		564
Deferred tax expense (benefit from):
Federal	68		(876)		(627)
State	(15)		(114)		(161)
Foreign	(98)		(7)		(294)
Total	(45)		(997)		(1,082)
Total provision for (benefit from) income taxes	$	939	$	29	$	(518)

Schedule of Effective Income Tax Rate Reconciliation

The following is a reconciliation of our effective tax rate to the statutory federal tax rate:


	Fiscal Year
	2022		2021		2020
Statutory tax rate	21.0	%	21.0	%	21.0	%
State, net of federal benefit	0.2		(0.8)		(3.6)
Foreign income taxed at different rates	(19.1)		(22.8)		(48.6)
Deemed inclusion of foreign earnings	9.4		12.7		23.3
Foreign-derived intangible income deduction	—		(3.1)		(1.5)
Deferred taxes on unremitted foreign earnings	0.1		(0.7)		(1.1)
Excess tax benefits from stock-based compensation	(3.0)		(4.6)		(6.0)
Research and development credit	(1.4)		(2.3)		(4.3)
Other, net	0.3		1.0		(0.4)
Effective tax rate on income before income taxes	7.5	%	0.4	%	(21.2)	%

The increase in provision for income taxes in fiscal year 2022 compared to fiscal year 2021 was primarily due to higher income from continuing operations.

The provision for income taxes in fiscal year 2021 compared to the benefit from income taxes in fiscal year 2020 was primarily due to higher income from continuing operations, offset in part by higher excess tax benefits from stock-based awards. The benefit from income taxes in fiscal year 2020 was primarily due to jurisdictional mix of income and expenses, discrete benefits from the remeasurement of certain deferred tax assets and liabilities in a foreign jurisdiction, and excess tax benefits from stock-based awards.

Our tax incentives from the Singapore Economic Development Board provide that any qualifying income earned in Singapore is subject to tax incentives or reduced rates of Singapore income tax, subject to our compliance with the conditions specified in these incentives and legislative developments. These Singapore tax incentives are expected 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 U.S. Tax Cuts and Jobs Act and other indirect tax impacts, the effect of these tax incentives and tax holiday was to decrease the provision for income taxes by approximately $1,821 million and $1,156 million for fiscal years 2022 and 2021, respectively, and increase the benefit from income taxes by approximately $833 million for fiscal year 2020.

Schedule of Deferred Tax Assets and Liabilities


	October 30, 2022		October 31, 2021

	(In millions)
Deferred income tax assets:
Net operating loss, credit and other carryforwards	$	1,808	$	1,774
Deferred revenue	645		1,332
Employee stock awards	183		192
Other deferred income tax assets	499		446
Gross deferred income tax assets	3,135		3,744
Less: valuation allowance	(1,777)		(1,782)
Deferred income tax assets	1,358		1,962
Deferred income tax liabilities:
Depreciation and amortization	341		847
Unamortized discount and issuance costs	322		374
Foreign earnings not indefinitely reinvested	86		73
Other deferred income tax liabilities	36		—
Deferred income tax liabilities	785		1,294

Net deferred income tax assets	$	573	$	668

Summary of Positions for which Significant Change in Unrecognized Tax Benefits is Reasonably Possible

The following table reconciles the beginning and ending balance of gross unrecognized tax benefits:


	Fiscal Year
	2022		2021		2020

	(In millions)
Beginning balance	$	5,030	$	4,748	$	4,422
Lapses of statutes of limitations	(50)		(58)		(95)
Increases in balances related to tax positions taken during prior periods (including those related to acquisitions made during the year)	—		41		98
Decreases in balances related to tax positions taken during prior periods	(113)		—		(14)
Increases in balances related to tax positions taken during current period	288		337		379
Decreases in balances related to settlements with taxing authorities	(38)		(38)		(42)
Ending balance	$	5,117	$	5,030	$	4,748

We recognize interest and penalties related to unrecognized tax benefits within the provision for (benefit from) income taxes. Accrued interest and penalties were included within other long-term liabilities. During fiscal years 2022 and 2021, we recognized interest and penalties of $25 million and $46 million, respectively, within the provision for income taxes. During fiscal year 2020, we recognized interest and penalties of $37 million within the benefit from income taxes. As of October 30, 2022 and October 31, 2021, the combined amount of cumulative accrued interest and penalties was approximately $411 million and $386 million, respectively.

As of October 30, 2022 and October 31, 2021, approximately $5,528 million and $5,416 million, respectively, of the unrecognized tax benefits and accrued interest and penalties would, if recognized, benefit our effective income tax rate. We are subject to U.S. income tax examination for fiscal years 2015 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 $163 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.