XML 27 R16.htm IDEA: XBRL DOCUMENT

Income Taxes	9 Months Ended
Income Taxes	Jun. 26, 2020
Income Tax Disclosure [Abstract]
Income Tax Disclosure	INCOME TAXES: On March 27, 2020, the CARES Act was enacted in response to COVID-19. The CARES Act, among other things, permits net operating losses ("NOLs") incurred in fiscal 2019, 2020 and 2021 to be carried back to each of the five preceding taxable years to generate a refund of previously paid income taxes. NOLs arising in fiscal 2019, 2020, or 2021 are created in years that have a 21.0% federal income tax rate. If these NOLs are carried back to years prior to fiscal 2018, the resulting refund would be in years with a 35.0% federal income tax rate. The CARES Act contains modifications on the limitation of business interest for fiscal years 2020 and 2021 to increase the allowable business interest deduction from 30.0% of adjusted taxable income to 50.0% of adjusted taxable income. The CARES Act also includes a technical correction to the Tax Cut and Jobs Act (the "TCJA") that provides that Qualified Improvement Property ("QIP"), which includes almost any improvement to the interior of leased or owned space, is eligible for bonus depreciation retroactively to the January 1, 2018 effective date of the TCJA. As a result of the CARES Act, the Company recorded a benefit to the (Benefit) Provision for Income Taxes of approximately $68.1 million and $58.8 million for the three and nine month periods of fiscal 2020, respectively. These benefits reflect the NOLs expected to be carried back to Pre-TCJA years during fiscal 2020, which are benefited at 35.0% as opposed to the current year rate of 21.0%. The NOL carryback generated for the nine months ended June 26, 2020 resulted in the Company establishing a $62.6 million income tax receivable, along with re-establishing $106.3 million of foreign tax credits and $28.9 million of general business credits that will be used to offset future federal income tax liabilities. The Company also recorded a valuation allowance to the (Benefit) Provision for Income Taxes of $17.4 million and $11.8 million for the three and nine month periods ended June 26, 2020, respectively, against certain foreign tax credits that were re-established via the NOL carryback. The Company will continue to monitor and assess the impact the CARES Act and similar legislation in other countries may have on the Company's business and financial results. As of each reporting date, the Company considers existing evidence, both positive and negative, that could impact the need for valuation allowances against deferred tax assets ("DTAs"). Based on cumulative losses and goodwill impairment recorded in the FSS International segment during the second quarter of fiscal 2020 (see Note 4) as negative evidence, the Company recorded a valuation allowance against DTAs of certain subsidiaries of approximately $8.6 million in the nine month period ending June 26, 2020. The effective tax rate for the three and nine months ended June 26, 2020 also includes an income tax benefit of approximately $0.6 million and $46.1 million, respectively, as a result of an excess tax benefit recognized in relation to equity awards exercised during the fiscal year, including by the former Chairman, President and Chief Executive Officer. The (Loss) Income Before Income Taxes for the nine month period of fiscal 2020 includes a non-cash impairment charge of goodwill for $198.6 million, which is nondeductible for income tax purposes (see Note 4).