XML 37 R22.htm IDEA: XBRL DOCUMENT
v3.21.2

Income Taxes | 12 Months Ended
--- | ---
Oct. 02, 2021
Income Tax Disclosure [Abstract] |
Income Taxes | INCOME TAXES Detail of the provision for income taxes from continuing operations consists of the following (in millions):
| 2021 |  | 2020 |  | 2019
Federal | $ | 791 |  |  | $ | 477 |  |  | $ | 314 |
State | 163 |  |  | 98 |  |  | 38 |
Foreign | 27 |  |  | 18 |  |  | 29 |
| $ | 981 |  |  | $ | 593 |  |  | $ | 381 |
Current | $ | 1,106 |  |  | $ | 575 |  |  | $ | 304 |
Deferred | (125) |  |  | 18 |  |  | 77 |
| $ | 981 |  |  | $ | 593 |  |  | $ | 381 |
The reasons for the difference between the statutory federal income tax rate and our effective income tax rate from continuing operations are as follows:
| 2021 |  | 2020 |  | 2019
Federal income tax rate | 21.0 | % |  | 21.0 | % |  | 21.0 | %
State income taxes | 3.3 |  |  | 2.9 |  |  | 2.8 |
Unrecognized tax benefits, net | (0.4) |  |  | (0.1) |  |  | (6.7) |
Foreign-derived intangible income deduction | (1.1) |  |  | (0.6) |  |  | (0.3) |
Goodwill | 1.8 |  |  | — |  |  | — |
Other | (0.3) |  |  | (0.9) |  |  | (0.7) |
| 24.3 | % |  | 22.3 | % |  | 16.1 | %
During fiscal 2021, state tax expense, net of federal benefit, was $135 million, and the tax benefit from foreign-derived intangible income deduction was $44 million. Non-deductible goodwill associated with the sale of our pet treats business increased the effective tax rate by 1.8%. During fiscal 2020, state tax expense, net of federal benefit, was $78 million. During fiscal 2019, changes in unrecognized tax benefits decreased tax expense by $160 million, and state tax expense, excluding changes in unrecognized tax benefits and net of federal tax benefit, was $66 million. Approximately $3,963 million, $2,605 million and $2,275 million of income from continuing operations before income taxes for fiscal 2021, 2020 and 2019, respectively, were from our operations based in the United States. We recognize deferred income taxes for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The tax effects of major items recorded as deferred tax assets and liabilities as of October 2, 2021, and October 3, 2020, are as follows (in millions):
| 2021 |  | 2020
| Assets |  | Liabilities |  | Assets |  | Liabilities
Property, plant and equipment | $ | — |  |  | $ | 990 |  |  | $ | — |  |  | $ | 923 |
Intangible assets | — |  |  | 1,564 |  |  | — |  |  | 1,591 |
ROU assets | — |  |  | 158 |  |  | — |  |  | 154 |
Accrued expenses | 558 |  |  | — |  |  | 341 |  |  | — |
Lease liabilities | 133 |  |  | — |  |  | 129 |  |  | — |
Net operating loss and other carryforwards | 167 |  |  | — |  |  | 137 |  |  | — |
Other | 79 |  |  | 251 |  |  | 149 |  |  | 265 |
| $ | 937 |  |  | $ | 2,963 |  |  | $ | 756 |  |  | $ | 2,933 |
Valuation allowance | $ | (151) |  |  |  |  | $ | (127) |  |  |
Net deferred tax liability |  |  | $ | 2,177 |  |  |  |  | $ | 2,304 |
At October 2, 2021, our gross state net operating loss carryforwards approximated $1,118 million, of which $1,020 million expire in fiscal years 2022 through 2042, and the remainder has no expiration. Gross foreign net operating loss carryforwards approximated $307 million, of which $122 million expire in fiscal years 2022 through 2033, and the remainder has no expiration. We also have tax credit carryforwards of approximately $40 million which expire in fiscal years 2022 through 2035. We have accumulated undistributed earnings of foreign subsidiaries aggregating approximately $419 million and $318 million at October 2, 2021, and October 3, 2020, respectively. Dividends after December 31, 2017 from foreign subsidiaries are generally not subject to U.S. federal income taxes. As a result, our intention is that excess cash held by our foreign subsidiaries that is not subject to regulatory restrictions will be repatriated net of applicable withholding taxes which are expected to be immaterial. The remainder of accumulated undistributed earnings are expected to be indefinitely reinvested outside of the United States. If these earnings were distributed in the form of dividends or otherwise, we could be subject to state income taxes and withholding taxes payable to various foreign countries. Due to the uncertainty of the manner in which the undistributed earnings would be brought back to the United States and the tax laws in effect at that time, it is not currently practicable to estimate the tax liability that might be payable on the repatriation of these foreign earnings; however, we do not expect any tax due to be material. The following table summarizes the activity related to our gross unrecognized tax benefits at October 2, 2021, October 3, 2020, and September 28, 2019 (in millions):
| 2021 |  | 2020 |  | 2019
Balance as of the beginning of the year | $ | 165 |  |  | $ | 169 |  |  | $ | 308 |
Increases related to current year tax positions | 25 |  |  | 21 |  |  | 20 |
Increases related to prior year tax positions | 7 |  |  | 5 |  |  | 21 |
Reductions related to prior year tax positions | (7) |  |  | (9) |  |  | (17) |
Reductions related to settlements | (1) |  |  | (3) |  |  | (9) |
Reductions related to expirations of statutes of limitations | (37) |  |  | (18) |  |  | (154) |
Balance as of the end of the year | $ | 152 |  |  | $ | 165 |  |  | $ | 169 |
The amount of unrecognized tax benefits, if recognized, that would impact our effective tax rate was $111 million at October 2, 2021 and $118 million at October 3, 2020. We classify interest and penalties on unrecognized tax benefits as income tax expense. At October 2, 2021, and October 3, 2020, before tax benefits, we had $49 million and $51 million, respectively, of accrued interest and penalties on unrecognized tax benefits. As of October 2, 2021, certain United States federal income tax returns are subject to examination for fiscal years 2013 through 2020. We are also subject to income tax examinations by major state and foreign jurisdictions for fiscal years 2015 through 2020 and 2016 through 2020, respectively. We do not expect material changes to our unrecognized tax benefits during the next twelve months.

X
- References No definition available. + Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration