Income Taxes (Tables)

12 Months Ended

Oct. 25, 2013

The provision for income taxes for continuing operations included in the Consolidated Statements of Income consists of the following:



In thousands	October 25, 2013			October 26, 2012			October 28, 2011
Current provision
Federal	$	127,069		$	159,294		$	94,024
State	6,621			16,410			7,357
Foreign	69,564			105,073			86,647
Total current provision	203,254			280,777			188,028
Deferred provision (benefit)
Federal	23,892			74,966			75,663
State	(1,331		)	399			5,567
Foreign	4,404			(18,272		)	(4,427		)
Total deferred provision	26,965			57,093			76,803
Total provision for income taxes	$	230,219		$	337,870		$	264,831

Domestic and Foreign Components of Income From Continuing Operations Before Income Taxes

The domestic and foreign components of income from continuing operations before income taxes are as follows:



In thousands	October 25, 2013		October 26, 2012		October 28, 2011
Domestic income from continuing operations	$	444,667	$	724,132	$	531,888
Foreign income from continuing operations	319,490		380,999		363,945
Pre-tax income from continuing operations	$	764,157	$	1,105,131	$	895,833

Income Tax Reconciliation

The reconciliation between the income tax provision recognized in our Consolidated Statements of Income and the income tax provision computed by applying the statutory federal income tax rate to the income from continuing operations are as follows:



In thousands	October 25, 2013		October 26, 2012		October 28, 2011
Income tax computed at federal statutory tax rate	35.0	%	35.0	%	35.0	%
Sub-part F income and foreign dividends, net of foreign tax credits	0.2		0.3		(0.9	)
Differences in foreign and U.S. tax rates	(5.3	)	(4.2	)	(4.3	)
State income taxes, net of federal tax impact	0.5		1.0		0.7
Resolution of prior years’ tax matters	—		—		0.9
Valuation allowance	1.1		0.1		0.1
IRC 199 manufacturing deduction	(2.0	)	(1.7	)	(1.4	)
Other items, net	0.6		0.1		(0.5	)
Effective income tax rate	30.1	%	30.6	%	29.6	%

Net Deferred Tax Asset

The components of the net deferred tax asset are as follows:



In thousands	October 25, 2013			October 26, 2012
Deferred tax assets:
Employee benefit related items	$	101,200		$	156,034
Tax credit carryforwards	2,622			5,665
Tax loss carryforwards	128,357			122,895
Inventories	32,464			29,952
Other deferred tax assets, net	32,378			63,266
Valuation allowance, current assets	(11,009		)	(5,281		)
Valuation allowance, non-current assets	(119,556		)	(117,354		)
Total deferred tax assets	166,456			255,177
Deferred tax liabilities:
Depreciation and amortization in excess of book expense	59,651			56,218
Intangibles	48,388			109,788
Total deferred tax liabilities	108,039			166,006
Net deferred tax asset	$	58,417		$	89,171

The net deferred tax assets are reflected in the Consolidated Balance Sheets as follows:



In thousands	October 25, 2013			October 26, 2012
Current deferred tax assets, included in Other current assets	$	69,352		$	90,510
Long-term deferred tax asset, included in Deferred income taxes	41,532			67,101
Current deferred tax liability, included in Other accrued liabilities	(2,087		)	(2,247		)
Long-term deferred tax liability, included in Other liabilities	(50,380		)	(66,193		)
Net deferred tax asset	$	58,417		$	89,171

Loss and Credit Carryforward Summary

The following table summarizes the components of our loss and credit carryforward:



Loss and Credit Carryforward Summary
	Amount
Description - In millions	Gross		Benefit		Valuation Allowance		Expiration Date(s)
Foreign capital losses	$	62.1	$	12.5	$	12.5	None
U.S. state operating losses	1,967.0		101.4		98.4		Various
Foreign losses	55.8		14.4		14.2		$5.4 - None $9.0 - 2014 to 2018
State tax credits	N/A		0.7		0.7		Various
Foreign tax credits	N/A		1.5		—		$1.4 - 2016 to 2018 $0.1 - 2021
Various international tax credits	N/A		0.4		0.3		None

Net Unrecognized Tax Benefit

Unrecognized tax benefits are as follows:



In thousands	October 25, 2013			October 26, 2012
Balance, beginning of year	$	33,471		$	10,370
Interest included in the beginning balance	—			(1,271		)
Additions for current year tax positions and acquisition	36			25,735
Additions for prior year tax positions	60,604			167
Reductions for prior year tax positions	(16,693		)	(1,530		)
Balance, end of year	$	77,418		$	33,471

- Definition

Tabular disclosure of tax positions taken in the tax returns filed or to be filed for which it is more likely than not that the tax position will not be sustained upon examination by taxing authorities (i.e., uncertain tax positions) and other types of income tax contingencies, including: (1) the policy on classification of interest and penalties; (2) a tabular reconciliation of the total amounts of unrecognized tax benefits at the beginning and end of the period; the total amount(s) of: (3) unrecognized tax benefits that, if recognized, would affect the effective tax rate, and (4) interest and penalties recognized in each of the income statement and balance sheet; (5) for positions for which it is reasonably possible that the total amounts unrecognized will significantly change within 12 months of the reporting date the: (i) nature of the uncertainty, (ii) nature of the event that could occur that would cause the change, and (iii) an estimate of the range of the reasonably possible change or a statement that an estimate of the range cannot be made; and (6) a description of tax years that remain subject to examination by major tax jurisdictions.

+ References+ Details