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Income Taxes | 3 Months Ended
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Sep. 28, 2018
Income Tax Disclosure [Abstract] |
Income Taxes | Note M — Income Taxes On December 22, 2017, H.R.1, also known as the “Tax Cuts and Jobs Act,” was signed into U.S. law (“Tax Act”). Among other provisions, the Tax Act reduced the U.S. statutory corporate income tax rate from a maximum 35 percent to a flat 21 percent, effective January 1, 2018. Effective Tax Rate Our effective tax rate (income taxes as a percentage of income from continuing operations before income taxes) was 16.0 percent in the quarter ended September 28, 2018 compared with 27.6 percent in the quarter ended September 29, 2017. In the quarter ended September 28, 2018, our effective tax rate benefited from the tax rate reduction under the Tax Act, and in the quarters ended September 28, 2018 and September 29, 2017, our effective tax rate benefited from the favorable impact of excess tax benefits related to equity-based compensation, and from several differences in GAAP and tax accounting related to investments. Tax Law Changes As of September 28, 2018, we have not fully completed our accounting for the income tax impact of enactment of the Tax Act. In accordance with SEC Staff Accounting Bulletin No.118 (“SAB 118”), we have recognized provisional amounts for income tax effects of the Tax Act that we were able to reasonably estimate. We intend to adjust the tax effects for the relevant items during the allowed measurement period. We are still evaluating certain aspects of the Tax Act and refining our calculations, which could potentially affect our current estimated valuation of our net deferred income tax balances and could give rise to new deferred tax amounts. The Tax Act provides for a one-time transition tax on our post-1986 earnings and profits of foreign subsidiaries (“foreign E&P”) that was previously deferred from U.S. income tax expense. We have provisionally determined that we will not owe any one-time transition tax. However, we are still refining our calculations, including estimated layers of foreign E&P for fiscal 2018, which could impact the amount of one-time transition tax we will owe. We are still in the process of evaluating the U.S. federal corporate income tax impacts of the Global Intangible Low Taxed Income (“GILTI”) and Foreign Derived Intangible Income (“FDII”) provisions of the Tax Act. In accordance with SAB 118, our first quarter tax expense includes estimated calculations for these provisions as a period cost in our effective tax rate and we will continue to modify and update our evaluation as additional regulations are issued by the U.S. Department of Treasury. Because of the potential impact of deficit allocations on the tax basis for netted foreign E&P, we are maintaining a deferred tax liability of approximately $24 million in respect of potential cumulative tax basis differences of $116 million. New statutory or regulatory guidance requires further analysis and may result in a change in our conclusion as to the need for a deferred tax liability in respect of these cumulative tax basis differences. Other than this deferred tax liability, we have provided for no additional income taxes on any remaining undistributed foreign E&P not subject to the transition tax, or any outside tax basis differences inherent in our foreign subsidiaries, because all other amounts continue to be reinvested indefinitely. We are continuing to monitor activity at the state and local level for conformity to the Tax Act. We do not expect a material impact to our state and local tax expense.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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