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Income Taxes (Tables) | 12 Months Ended
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Sep. 27, 2019
Income Tax Disclosure [Abstract] |
Income from continuing operations before income taxes by source of income | The components of income before income taxes by source of income are as follows (in thousands):
|  | Fiscal Year Ended
|  | September 27, 2019 |  | September 28, 2018 |  | September 29, 2017
United States |  | $ | 418,902 |  |  | $ | 326,277 |  |  | $ | 362,783 |
Non-U.S. |  | 137,270 |  |  | 145,599 |  |  | 157,859 |
|  | $ | 556,172 |  |  | $ | 471,876 |  |  | $ | 520,642 |
Provision (benefit) for income taxes | The provision (benefit) for income taxes consists of (in thousands):
|  | Fiscal Year Ended
|  | September 27, 2019 |  | September 28, 2018 |  | September 29, 2017
Current: |  |  |  |  |  |
Federal |  | $ | 8,781 |  |  | $ | (48,249 | ) |  | $ | 111,175 |
State and local |  | 19,966 |  |  | 11,356 |  |  | 15,455 |
Non-U.S. |  | 38,456 |  |  | 44,618 |  |  | 57,681 |
|  | 67,203 |  |  | 7,725 |  |  | 184,311 |
Deferred: |  |  |  |  |  |
Federal |  | 35,251 |  |  | (113,475 | ) |  | (21,956 | )
State and local |  | 7,683 |  |  | 7,408 |  |  | 3,165 |
Non-U.S. |  | (2,431 | ) |  | 1,778 |  |  | (19,065 | )
|  | 40,503 |  |  | (104,289 | ) |  | (37,856 | )
|  | $ | 107,706 |  |  | $ | (96,564 | ) |  | $ | 146,455 |
Effective Income Tax Rate Reconciliation | The provision for income taxes varies from the amount determined by applying the United States Federal statutory rate to pretax income as a result of the following (all percentages are as a percentage of income before income taxes):
|  | Fiscal Year Ended
|  | September 27, 2019 |  | September 28, 2018 |  | September 29, 2017
United States statutory income tax rate |  | 21.0 | % |  | 24.5 | % |  | 35.0 | %
Increase (decrease) in taxes, resulting from: |  |  |  |  |  |
State income taxes, net of Federal tax benefit |  | 4.2 |  |  | 3.2 |  |  | 2.3 |
Foreign taxes(1) |  | 2.2 |  |  | 3.3 |  |  | (4.3 | )
Permanent book/tax differences |  | 0.4 |  |  | (1.2 | ) |  | (3.8 | )
Uncertain tax positions |  | — |  |  | (0.3 | ) |  | 1.4 |
U.S. Tax Reform - Remeasurement of deferred taxes |  | — |  |  | (49.3 | ) |  | — |
U.S. Tax Reform - Foreign tax credit valuation allowance |  | (2.3 | ) |  | 2.8 |  |  | — |
Sale of Healthcare Technologies |  | (4.4 | ) |  | — |  |  | — |
Tax credits & other |  | (1.7 | ) |  | (3.5 | ) |  | (2.5 | )
Effective income tax rate |  | 19.4 | % |  | (20.5 | )% |  | 28.1 | %
(1) | Includes differences between the United States statutory tax rate and tax rates in foreign jurisdictions, foreign withholding taxes and taxation of foreign earnings, which includes the transition tax on deemed repatriated earnings of foreign subsidiaries and the tax on "Global Intangible Low-Taxed Income" ("GILTI").
Components of deferred taxes | As of September 27, 2019 and September 28, 2018, the components of deferred taxes are as follows (in thousands):
|  | September 27, 2019 |  | September 28, 2018
Deferred tax liabilities: |  |  |  |
Property and equipment |  | $ | 137,293 |  |  | $ | 126,345 |
Investments |  | 11,902 |  |  | 12,213 |
Other intangible assets, including goodwill |  | 462,637 |  |  | 474,263 |
Cost to fulfill - Rental merchandise in-service |  | 83,483 |  |  | 63,835 |
Derivatives |  | — |  |  | 21,599 |
Other |  | 37,309 |  |  | 17,450 |
Gross deferred tax liability |  | 732,624 |  |  | 715,705 |
Deferred tax assets: |  |  |  |
Derivatives |  | 11,949 |  |  | — |
Insurance |  | 34,112 |  |  | 40,240 |
Employee compensation and benefits |  | 113,269 |  |  | 136,603 |
Accruals and allowances |  | 31,844 |  |  | 19,338 |
Net operating loss/credit carryforwards and other |  | 56,508 |  |  | 60,576 |
Gross deferred tax asset, before valuation allowances |  | 247,682 |  |  | 256,757 |
Valuation allowances |  | (17,532 | ) |  | (29,023 | )
Net deferred tax liability |  | $ | 502,474 |  |  | $ | 487,971 |
Schedule of Valuation and Qualifying Accounts Disclosure | Rollforward of the valuation allowance is as follows:
|  | September 27, 2019 |  | September 28, 2018
Balance, beginning of year |  | $ | (29,023 | ) |  | $ | (11,513 | )
Additions(1) |  | (2,330 | ) |  | (21,101 | )
Subtractions(2) |  | 13,821 |  |  | 3,591 |
Balance, end of year |  | $ | (17,532 | ) |  | $ | (29,023 | )
(1) | The additions in fiscal 2019 were mainly driven by losses in certain foreign subsidiaries. The additions in fiscal 2018 were mainly driven by the Tax Cuts and Jobs Act impacting the ability to utilize FTC carryforwards going forward, as well as the inability to use foreign NOL carryforwards.
(2) | Valuation allowances against FTC carryforwards were released during fiscal 2019 as a result of Treasury Regulations. During fiscal 2018, tax planning resulted in taxable income in separate Company states that had historical losses.
ARAMARK AND SUBSIDIARIES SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS AND RESERVES FOR THE FISCAL YEARS ENDED SEPTEMBER 27, 2019, SEPTEMBER 28, 2018 AND SEPTEMBER 29, 2017
|  |  |  | Additions |  | Reductions |  |
|  | Balance, Beginning of Period |  | Charged to Income |  | Deductions from Reserves(1) |  | Balance, End of Period
Description |  |  |  |  |  |  |  |
Fiscal Year 2019 |  |  |  |  |  |  |  |
Reserve for doubtful accounts, advances & current notes receivable |  | $ | 52,682 |  |  | $ | 21,821 |  |  | $ | 24,937 |  |  | $ | 49,566 |
Fiscal Year 2018 |  |  |  |  |  |  |  |
Reserve for doubtful accounts, advances & current notes receivable |  | $ | 53,416 |  |  | $ | 22,009 |  |  | $ | 22,743 |  |  | $ | 52,682 |
Fiscal Year 2017 |  |  |  |  |  |  |  |
Reserve for doubtful accounts, advances & current notes receivable |  | $ | 48,058 |  |  | $ | 18,141 |  |  | $ | 12,783 |  |  | $ | 53,416 |
(1) | Amounts determined not to be collectible and charged against the reserve and translation.
Reconciliation of the beginning and ending amount of gross unrecognized tax benefits | A reconciliation of the beginning and ending amount of gross unrecognized tax benefits follows (in thousands):
| September 27, 2019 |  | September 28, 2018
Balance, beginning of year | $ | 29,089 |  |  | $ | 30,812 |
Additions based on tax positions taken in the current year | 3,713 |  |  | 709 |
Additions for tax positions taken in prior years | 6,531 |  |  | 1,505 |
Reductions for remeasurements, settlements and payments | (1,484 | ) |  | (2,368 | )
Reductions due to statute expiration | (1,577 | ) |  | (1,569 | )
Balance, end of year | $ | 36,272 |  |  | $ | 29,089 |

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