Income Taxes (Tables)

12 Months Ended

Sep. 29, 2013

Components of Earnings Before Income Taxes

The components of earnings/(loss) before income taxes were as follows (in millions):



Fiscal Year Ended	Sep 29, 2013								Sep 30, 2012		Oct 2, 2011
	Total			Litigation charge			All Other		Sep 30, 2012		Oct 2, 2011
United States	$	(674.0	)	$	(2,784.1	)	$	2,110.1	$	1,679.6	$	1,523.4
Foreign	444.1			—			444.1		379.5		287.7
Total earnings/(loss) before income taxes	$	(229.9	)	$	(2,784.1	)	$	2,554.2	$	2,059.1	$	1,811.1

Provision for Income Taxes

Provision/(benefit) for income taxes (in millions):



Fiscal Year Ended	Sep 29, 2013									Sep 30, 2012			Oct 2, 2011
	Total			Litigation charge			All Other			Sep 30, 2012			Oct 2, 2011
Current taxes:
US federal	$	616.6		$	—		$	616.6		$	466.0		$	344.7
US state and local	93.8			—			93.8			79.9			61.2
Foreign	95.9			—			95.9			76.8			37.3
Total current taxes	806.3			—			806.3			622.7			443.2
Deferred taxes:
US federal	(898.8		)	(922.3		)	23.5			49.2			111.6
US state and local	(144.0		)	(148.7		)	4.7			(0.7		)	8.3
Foreign	(2.2		)	—			(2.2		)	3.2			—
Total deferred taxes	(1,045.0		)	(1,071.0		)	26.0			51.7			119.9
Total provision/(benefit) for income taxes	$	(238.7	)	$	(1,071.0	)	$	832.3		$	674.4		$	563.1

Reconciliation of The Statutory US Federal Income Tax Rate With Our Effective Income Tax Rate

Reconciliation of the statutory US federal income tax rate with our effective income tax rate:



Fiscal Year Ended	Sep 29, 2013						Sep 30, 2012		Oct 2, 2011
	Total		Litigation charge		All Other		Sep 30, 2012		Oct 2, 2011
Statutory rate	35.0	%	35.0	%	35.0	%	35.0	%	35.0	%
State income taxes, net of federal tax benefit	15.8	%	3.5	%	2.4	%	2.5	%	2.5	%
Benefits and taxes related to foreign operations	37.5	%	—	%	(3.4	)%	(3.3	)%	(3.1	)%
Domestic production activity deduction	8.1	%	—	%	(0.7	)%	(0.7	)%	(0.8	)%
Domestic tax credits	2.8	%	—	%	(0.3	)%	(0.3	)%	(0.7	)%
Charitable contributions	3.9	%	—	%	(0.3	)%	(0.5	)%	(0.3	)%
Other, net⁽¹⁾	0.7	%	—	%	(0.1	)%	0.1	%	(1.5	)%
Effective tax rate	103.8	%	38.5	%	32.6	%	32.8	%	31.1	%


⁽¹⁾	Fiscal 2011 includes a benefit of 0.9% related to the acquisition of the remaining ownership interest in Switzerland and Austria.

Tax Effect of Temporary Differences and Carryforwards that Comprise Significant Portions of Deferred Tax Assets and Liabilities

Tax effect of temporary differences and carryforwards that comprise significant portions of deferred tax assets and liabilities (in millions):



	Sep 29, 2013			Sep 30, 2012
Deferred tax assets:
Property, plant and equipment	$	64.9		$	62.7
Accrued occupancy costs	69.0			72.0
Accrued compensation and related costs	77.6			66.9
Other accrued liabilities	22.0			15.7
Asset retirement obligation asset	21.0			20.1
Deferred revenue	49.9			43.7
Asset impairments	33.3			38.5
Tax credits	19.1			14.6
Stock based compensation	120.9			131.8
Net operating losses	99.0			99.2
Litigation charge	1,071.9			—
Other	62.7			80.9
Total	$	1,711.3		$	646.1
Valuation allowance	(160.5		)	(154.2		)
Total deferred tax asset, net of valuation allowance	$	1,550.8		$	491.9
Deferred tax liabilities:
Property, plant and equipment	(182.9		)	(89.0		)
Intangible assets and goodwill	(81.6		)	(34.0		)
Other	(53.1		)	(44.8		)
Total	(317.6		)	(167.8		)
Net deferred tax asset	$	1,233.2		$	324.1
Reported as:
Current deferred income tax assets	$	277.3		$	238.7
Long-term deferred income tax assets	967.0			97.3
Current deferred income tax liabilities (included in Accrued liabilities)	(1.0		)	(1.3		)
Long-term deferred income tax liabilities (included in Other long-term liabilities)	(10.1		)	(10.6		)
Net deferred tax asset	$	1,233.2		$	324.1

Summary of Activity Related to Unrecognized Tax Benefits

The following table summarizes the activity related to our unrecognized tax benefits (in millions):



	Sep 29, 2013			Sep 30, 2012			Oct 2, 2011
Beginning balance	$	75.3		$	52.9		$	68.4
Increase related to prior year tax positions	8.9			8.8			4.4
Decrease related to prior year tax positions	(9.3		)	—			(32.3		)
Increase related to current year tax positions	19.3			20.0			26.0
Decrease related to current year tax positions	(0.4		)	(1.1		)	(0.8		)
Decreases related to settlements with taxing authorities	—			(0.5		)	(5.0		)
Decreases related to lapsing of statute of limitations	(5.0		)	(4.8		)	(7.8		)
Ending balance	$	88.8		$	75.3		$	52.9

- 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.

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