Taxes on Earnings (Tables)

12 Months Ended

Jul. 28, 2019

Schedule of Components of Income Tax Expense (Benefit) [Table Text Block]

The provision for income taxes on earnings from continuing operations consists of the following:



	2019			2018			2017
Income taxes:
Currently payable:
Federal	$	104		$	93		$	241
State	19			26			39
Non-U.S.	5			11			2
	128			130			282
Deferred:
Federal	19			(26		)	97
State	7			14			2
Non-U.S.	(3		)	(12		)	11
	23			(24		)	110
	$	151		$	106		$	392

Schedule of Income before Income Tax, Domestic and Foreign [Table Text Block]



	2019		2018			2017
Earnings from continuing operations before income taxes:
United States	$	624	$	832		$	1,264
Non-U.S.	1		(2		)	52
	$	625	$	830		$	1,316

Schedule of Effective Income Tax Rate Reconciliation [Table Text Block]

The following is a reconciliation of the effective income tax rate on continuing operations to the U.S. federal statutory income tax rate:



	2019		2018		2017
Federal statutory income tax rate	21.0	%	21.0	%	35.0	%
State income taxes (net of federal tax benefit)	2.2		3.0		2.1
Tax effect of international items	—		(0.5	)	(0.4	)
Federal manufacturing deduction	—		(1.4	)	(2.2	)
Tax Reform - impact on U.S. deferred tax assets and liabilities⁽¹⁾	—		(21.7	)	—
Tax Reform - transition tax⁽¹⁾	0.3		6.4		—
Effect of higher U.S. federal statutory tax rate⁽¹⁾	—		5.3		—
Foreign exchange losses⁽²⁾	—		—		(3.8	)
Divestiture impact on deferred taxes	1.2		—		—
Other	(0.5	)	0.7		(0.9	)
Effective income tax rate	24.2	%	12.8	%	29.8	%

_______________________________________


⁽¹⁾	The Tax Cuts and Jobs Act of 2017 (the Act) was enacted into law on December 22, 2017, and made significant changes to corporate taxation. Changes under the Act included:


•	Reducing the federal corporate tax rate from 35% to 21% effective January 1, 2018. A blended rate applied for fiscal 2018 non-calendar year end companies for the fiscal periods that included the effective date of the rate change. The impact of this is shown as "Effect of higher U.S. federal statutory tax rate;"


•	Repealing the exception for deductibility of performance-based compensation to covered employees, which impacted us beginning in 2019, along with expanding the number of covered employees;


•	Transitioning to a territorial system for taxation on foreign earnings along with the imposition of a transition tax in 2018 on the deemed repatriation of unremitted foreign earnings;


•	Immediate expensing of machinery and equipment placed into service after September 27, 2017;


•	Eliminating the deduction for domestic manufacturing activities, which impacted us beginning in 2019;


•	Changes to the taxation of multinational companies, including a new minimum tax on Global Intangible Low-Taxed Income, a new Base Erosion Anti-Abuse Tax, and a new U.S. corporate deduction for Foreign-Derived Intangible Income, all of which were effective for us beginning in 2019; and


•	Limiting the deductibility of interest expense to 30% of adjusted taxable income, which was effective for us beginning in 2019.

As a result of the Act, we recognized a benefit of $179 in 2018 on the remeasurement of deferred tax assets and liabilities and expenses of $2 in 2019 and $53 in 2018 on the transition tax on unremitted foreign earnings.


⁽²⁾	The 2017 rate was favorably impacted by a $52 benefit primarily related to the sale of intercompany notes receivable to a financial institution, which resulted in the recognition of foreign exchange losses.

Schedule of Deferred Tax Assets and Liabilities [Table Text Block]

Deferred tax liabilities and assets of continuing operations and discontinued operations are comprised of the following:



	2019			2018
Depreciation	$	336		$	342
Amortization	877			868
Other	16			35
Deferred tax liabilities	1,229			1,245
Benefits and compensation	157			144
Pension benefits	46			24
Tax loss carryforwards	43			65
Capital loss carryforwards	287			88
Outside basis difference	116			—
Other	82			92
Gross deferred tax assets	731			413
Deferred tax asset valuation allowance	(427		)	(133		)
Deferred tax assets, net of valuation allowance	304			280
Net deferred tax liability	$	925		$	965

Schedule of Unrecognized Tax Benefits Roll Forward [Table Text Block]

A reconciliation of the activity related to unrecognized tax benefits follows:



	2019			2018			2017
Balance at beginning of year	$	32		$	64		$	63
Increases related to prior-year tax positions	1			—			4
Decreases related to prior-year tax positions	(1		)	(37		)	—
Increases related to current-year tax positions	2			2			4
Settlements	(9		)	(1		)	(7		)
Lapse of statute	(1		)	—			—
Increase due to acquisitions	—			4			—
Balance at end of year	$	24		$	32		$	64