Income Taxes (Tables)

12 Months Ended

Sep. 24, 2016

Income Tax Disclosure [Abstract]

Provision for Income Taxes

The provision for income taxes for 2016, 2015 and 2014, consisted of the following (in millions):

	2016			2015			2014
Federal:
Current	$	7,652		$	11,730		$	8,624
Deferred	5,043			3,408			3,183
	12,695			15,138			11,807
State:
Current	990			1,265			855
Deferred	(138		)	(220		)	(178		)
	852			1,045			677
Foreign:
Current	2,105			4,744			2,147
Deferred	33			(1,806		)	(658		)
	2,138			2,938			1,489
Provision for income taxes	$	15,685		$	19,121		$	13,973

Reconciliation of Provision for Income Taxes

A reconciliation of the provision for income taxes, with the amount computed by applying the statutory federal income tax rate (35% in 2016, 2015 and 2014) to income before provision for income taxes for 2016, 2015 and 2014, is as follows (dollars in millions):

	2016			2015			2014
Computed expected tax	$	21,480		$	25,380		$	18,719
State taxes, net of federal effect	553			680			469
Indefinitely invested earnings of foreign subsidiaries	(5,582		)	(6,470		)	(4,744		)
Domestic production activities deduction	(382		)	(426		)	(495		)
Research and development credit, net	(371		)	(171		)	(88		)
Other	(13		)	128			112
Provision for income taxes	$	15,685		$	19,121		$	13,973
Effective tax rate	25.6		%	26.4		%	26.1		%

Significant Components of Deferred Tax Assets and Liabilities

As of September 24, 2016 and September 26, 2015, the significant components of the Company’s deferred tax assets and liabilities were (in millions):

	2016			2015
Deferred tax assets:
Accrued liabilities and other reserves	$	4,135		$	4,205
Basis of capital assets	2,107			2,238
Deferred revenue	1,717			1,941
Deferred cost sharing	667			667
Share-based compensation	601			575
Unrealized losses	—			564
Other	788			721
Total deferred tax assets, net of valuation allowance of $0	10,015			10,911
Deferred tax liabilities:
Unremitted earnings of foreign subsidiaries	31,436			26,868
Other	485			303
Total deferred tax liabilities	31,921			27,171
Net deferred tax liabilities	$	(21,906	)	$	(16,260	)

Aggregate Changes in Gross Unrecognized Tax Benefits Excluding Interest and Penalties

The aggregate changes in the balance of gross unrecognized tax benefits, which excludes interest and penalties, for 2016, 2015 and 2014, is as follows (in millions):

	2016			2015			2014
Beginning Balance	$	6,900		$	4,033		$	2,714
Increases related to tax positions taken during a prior year	1,121			2,056			1,295
Decreases related to tax positions taken during a prior year	(257		)	(345		)	(280		)
Increases related to tax positions taken during the current year	1,578			1,278			882
Decreases related to settlements with taxing authorities	(1,618		)	(109		)	(574		)
Decreases related to expiration of statute of limitations	—			(13		)	(4		)
Ending Balance	$	7,724		$	6,900		$	4,033