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Income Taxes
9 Months Ended
Jun. 02, 2016
Income Tax Disclosure [Abstract]  
Income Taxes
Income Taxes

Income taxes for the third quarter and first nine months of 2016 included $71 million and $103 million, respectively, and for the third quarter and first nine months of 2015 included $67 million and $138 million, respectively, related to changes in amounts of net deferred tax assets associated with MMJ and MMT. Income taxes also included a benefit of $41 million in the first quarter of 2016 related to a U.S. valuation allowance release resulting from the acquisition of Tidal Systems, Ltd. Income taxes for the third quarter and first nine months of 2016 also included tax benefits of $52 million and $58 million, respectively, related to the favorable resolution of certain prior year tax matters, which were previously reserved as uncertain tax positions. The remaining taxes for these periods primarily reflect taxes for our other non-U.S. operations.

We have a full valuation allowance for our net deferred tax asset associated with our U.S. operations.  Management continues to evaluate future projected financial performance to determine whether such performance is sufficient evidence to support a reduction in or reversal of the valuation allowance.  The amount of the deferred tax asset considered realizable could be adjusted if sufficient positive evidence exists. Income taxes on U.S. operations in the third quarters and first nine months of 2016 and 2015 were substantially offset by changes in the valuation allowance.

We operate in tax jurisdictions, including Singapore and Taiwan, where our earnings are indefinitely reinvested and are taxed at lower effective tax rates than the U.S. statutory rate. We operate in a number of locations outside the U.S., including Singapore and, to a lesser extent, Taiwan, where we have tax incentive arrangements that are conditional, in part, upon meeting certain business operations and employment thresholds. The effect of tax incentive arrangements, which expire in whole or in part at various dates through 2030, were not significant to our tax provision for the third quarter or the first nine months of 2016. These arrangements reduced our tax provision for the third quarter and first nine months of 2015 by $52 million (benefitting our diluted earnings per share by $0.04), and $289 million ($0.24 per diluted share), respectively.