Table of Contents APPLIED MATERIALS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) At October 27, 2019, Applied has state research and development tax credit carryforwards of $264 million, including $252 million of credits that are carried over until exhausted and $11 million that are carried over for 15 years and begin to expire in fiscal 2029. It is more likely than not that all tax credit carryforwards, net of valuation allowance, will be utilized. Applied maintains liabilities for uncertain tax positions. These liabilities involve considerable judgment and estimation and are continuously monitored based on the best information available. Gross unrecognized tax benefits are classified as non-current income taxes payable or as a reduction in deferred tax assets. A reconciliation of the beginning and ending balances of gross unrecognized tax benefits in each fiscal year is as follows:  Included in the balance of unrecognized tax benefits for fiscal 2019, 2018 and 2017 are $758 million, $294 million, and $284 million, respectively, of tax benefits that, if recognized, would affect the effective tax rate. In fiscal 2019, Applied paid an immaterial amount as a result of settlements with tax authorities. In fiscal 2018, Applied paid $158 million, including interest and penalties, as a result of a settlement in Israel for fiscal 2011 through fiscal 2015 resulting in the recognition of a tax expense of $6 million. In fiscal 2017, Applied paid $29 million, including interest and penalties, as a result of a settlement in Italy for fiscal 2011 resulting in the recognition of a tax expense of $6 million. Applied’s tax returns remain subject to examination by taxing authorities. These include U.S. returns for fiscal 2015 and later years, and foreign tax returns for fiscal 2010 and later years. The increases in tax positions for prior years of $441 million for fiscal 2019 include the effect of adoption of Accounting  Standard Update 2016- 16 Income Tax (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory (See Note 1). Tax expense for interest and penalties on unrecognized tax benefits for fiscal 2019, 2018 and 2017 was $24 million, $12 million and $17 million, respectively. The income tax liability for interest and penalties for fiscal 2019, 2018 and 2017 was $50 million, $26 million and $46 million, respectively, and was classified as non-current income taxes payable. The timing of the resolution of income tax examinations, as well as the amounts and timing of various tax payments that may be part of the settlement process, is highly uncertain. This could cause fluctuations in Applied’s financial condition and results of operations. Applied continues to have ongoing negotiations with various taxing authorities throughout the year. Applied leases some of its facilities and equipment under non-cancelable operating leases and has options to renew most leases, with rentals to be negotiated. Total rent expense for fiscal 2019, 2018 and 2017, was $51 million, $50 million and $34 million, respectively. As of October 27, 2019, future minimum lease payments are expected to be as follows:  100 Note 15 Warranty, Guarantees, Commitments and Contingencies Leases 2019 2018 2017 (In millions) Beginning balance of gross unrecognized tax benefits $ 374  $ 391  $ 320  Settlements with tax authorities (1) (152) (42) Lapses of statutes of limitation (2) (37) (15) Increases in tax positions for current year 33  91  95  Increases in tax positions for prior years 441  83  33  Decreases in tax positions for prior years —  (2) —  Ending balance of gross unrecognized tax benefits $ 845  $ 374  $ 391  Lease Payments Fiscal (In millions) 2020 $ 45  2021 34  2022 24  2023 21  2024 17  Thereafter 30  $ 171 