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Income Taxes | 12 Months Ended
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Oct. 30, 2016
Income Taxes |
Income Taxes | Note K Income Taxes The components of the provision for income taxes are as follows:
(in thousands) | 2016 | 2015 | 2014
Current: |  |  |
U.S. Federal | $ 341,799 | $ 299,557 | $ 264,533
State | 33,753 | 39,817 | 34,034
Foreign | 6,819 | 10,526 | 7,759
Total current | 382,371 | 349,900 | 306,326
Deferred: |  |  |
U.S. Federal | 40,456 | 18,451 | 8,756
State | 3,770 | 1,070 | 873
Foreign | 101 | 458 | 171
Total deferred | 44,327 | 19,979 | 9,800
Total provision for income taxes | $ 426,698 | $ 369,879 | $ 316,126
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The Company believes that, based upon its lengthy and consistent history of profitable operations, it is more likely than not the net deferred tax assets of $6.2 million will be realized on future tax returns, primarily from the generation of future taxable income. Significant components of the deferred income tax liabilities and assets are as follows:
| O ctober 30, | O ctober 25,
(in thousands) | 2016 | 2015
D eferred tax liabilities: |  |
G oodwill and intangible assets | $ (250,330) | $ (213,312)
Tax over book depreciation and basis differences | (98,628) | (94,496)
O ther, net | (18,295) | (18,788)
D eferred tax assets: |  |
P ension and post-retirement benefits | 182,444 | 154,306
Employee compensation related liabilities | 107,343 | 109,061
M arketing and promotional accruals | 36,844 | 37,603
O ther, net | 46,845 | 48,432
N et deferred tax assets | $ 6,223 | $ 22,806
Reconciliation of the statutory federal income tax rate to the Company’s effective tax rate is as follows:
| 2016 | 2015 | 2014
U.S. statutory rate | 35.0% | 35.0% | 35.0%
State taxes on income, net of federal tax benefit | 2.1 | 2.7 | 2.8
Domestic production activities deduction | (2.8) | (2.6) | (2.7)
Foreign tax credit | (0.9) | – | –
All other, net | (1.0) | (0.1) | (0.8)
Effective tax rate | 32.4% | 35.0% | 34.3%
In fiscal year 2016, the Company approved a repatriation of $38.0 million of foreign earnings related to an international entity restructuring which generated a U.S. tax benefit of $12.1 million. The Company recorded a favorable discrete tax event related to this transaction. Undistributed earnings of the Company’s foreign subsidiaries and joint ventures, aggregating to approximately $62.5 million at October 30, 2016, are considered to be permanently reinvested, and accordingly, no provision for U.S. income taxes has been provided thereon. It is not practicable to determine the deferred tax liability for temporary differences related to these foreign earnings. Total income taxes paid during fiscal years 2016, 2015, and 2014 were $372.0 million, $296.5 million, and $285.8 million, respectively. The following table sets forth changes in the unrecognized tax benefits, excluding interest and penalties, for fiscal years 2015 and 2016.
(in thousands) |
Balance as of October 26, 2014 | $ 22,608
Tax positions related to the current period: |
Increases | 2,920
Tax positions related to prior periods: |
Increases | 1,629
Decreases | (796)
Settlements | (2,839)
Decreases related to a lapse of applicable statute of limitations | (2,185)
Balance as of October 25, 2015 | $ 21,337
Tax positions related to the current period: |
Increases | 3,587
Tax positions related to prior periods: |
Increases | 9,723
Decreases | (3,913)
Settlements | (1,273)
Decreases related to a lapse of applicable statute of limitations | (2,072)
Balance as of October 30, 2016 | $ 27,389
The amount of unrecognized tax benefits, including interest and penalties is recorded in other long-term liabilities. If recognized as of October 30, 2016, and October 25, 2015, $19.5 million and $16.0 million, respectively, would impact the Company’s effective tax rate. The Company includes accrued interest and penalties related to uncertain tax positions in income tax expense, with gains of $0.5 million included in expense for fiscal year 2016. The amount of accrued interest and penalties at October 30, 2016, and October 25, 2015, associated with unrecognized tax benefits was $2.6 million and $3.2 million, respectively. The Company is regularly audited by federal and state taxing authorities. The United States Internal Revenue Service (I.R.S.) concluded their examination of fiscal years 2013 and 2014 in the third quarter of fiscal year 2016. The Company has elected to participate in the Compliance Assurance Process (CAP) for fiscal years 2015 and 2016. The objective of CAP is to contemporaneously work with the I.R.S. to achieve federal tax compliance and resolve all or most of the issues prior to filing of the tax return. The Company may elect to continue participating in CAP for future tax years; the Company may withdraw from the program at any time. The Company is in various stages of audit by several state taxing authorities on a variety of fiscal years, as far back as 2011. While it is reasonably possible that one or more of these audits may be completed within the next 12 months and the related unrecognized tax benefits may change based on the status of the examinations, it is not possible to reasonably estimate the effect of any amount of such change to previously recorded uncertain tax positions.

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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://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32559-109319 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32718-109319 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32639-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32537-109319 + Details
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