INCOME TAXES

Income tax expense consists of the following:



	Successor		Predecessor
						Fiscal Year Ended
	September 27 - December 29, 2013		April 29 - September 26, 2013			April 28, 2013			April 29, 2012			May 1, 2011
	(in millions)
Current income tax expense:
Federal	$	0.2	$	13.8		$	39.8		$	72.7		$	57.6
State	0.9		0.1			6.1			8.4			17.2
Foreign	0.2		2.5			5.5			1.1			3.1
	1.3		16.4			51.4			82.2			77.9
Deferred income tax expense (benefit):
Federal	7.4		7.1			(2.6		)	82.1			128.3
State	1.7		(11.4		)	(10.5		)	11.2			24.2
Foreign	5.4		0.6			7.8			(3.1		)	5.7
	14.5		(3.7		)	(5.3		)	90.2			158.2
Total income tax expense	$	15.8	$	12.7		$	46.1		$	172.4		$	236.1

A reconciliation of taxes computed at the federal statutory rate to the provision for income taxes is as follows:



	Successor		Predecessor
					Fiscal Year Ended
	September 27 - December 29, 2013		April 29 - September 26, 2013		April 28, 2013		April 29, 2012		May 1, 2011
Federal income taxes at statutory rate	35.0	%	35.0	%	35.0	%	35.0	%	35.0	%
State income taxes, net of federal tax benefit	3.8		(10.6	)	(0.2	)	2.1		3.4
Foreign income taxes	16.4		10.4		(1.7	)	(0.2	)	(1.2	)
Unremitted earnings	—		—		—		2.6		—
Net change in uncertain tax positions	(1.8	)	(1.3	)	0.6		(2.4	)	(0.3	)
Net change in valuation allowance	(20.1	)	(10.1	)	(4.8	)	(0.9	)	(3.4	)
Tax credits	(4.5	)	(6.5	)	(5.7	)	(1.0	)	(1.1	)
Manufacturer's deduction	(0.6	)	(0.2	)	(1.5	)	(1.7	)	(1.8	)
Adjustment to goodwill	—		—		—		—		2.0
Other	3.1		3.0		(1.6	)	(1.2	)	(1.4	)
Effective tax rate	31.3	%	19.7	%	20.1	%	32.3	%	31.2	%

The unremitted earnings impact to the effective tax rate in fiscal 2012 resulted primarily from the CFG Consolidation Plan.

We had income taxes receivable of $36.7 million, $79.4 million and $101.7 million as of December 29, 2013, April 28, 2013 and April 29, 2012, respectively, in prepaid expenses and other current assets.

The tax effects of temporary differences consist of the following:



	Successor			Predecessor
	December 29, 2013			April 28, 2013			April 29, 2012
	(in millions)
Deferred tax assets:
Pension and other retirement liabilities	$	160.8		$	272.4		$	256.4
Tax credits, carryforwards and net operating losses	68.0			77.3			85.6
Accrued expenses and other current liabilities	49.8			32.2			53.2
Derivatives	28.8			—			—
Employee benefits	26.6			17.3			—
Other	28.3			10.2			30.8
	362.3			409.4			426.0
Valuation allowance	(42.3		)	(43.5		)	(54.6		)
Total deferred tax assets	$	320.0		$	365.9		$	371.4
Deferred tax liabilities:
Property, plant and equipment	$	518.1		$	371.9		$	385.6
Intangible assets	415.7			134.3			125.8
Derivatives	—			1.5			31.9
Employee benefits	—			—			13.7
Investments in subsidiaries	65.6			44.1			44.6
Total deferred tax liabilities	$	999.4		$	551.8		$	601.6

The following table presents the classification of deferred taxes in our balance sheets as of December 29, 2013, April 28, 2013 and April 29, 2012:



	Successor		Predecessor
	December 29, 2013		April 28, 2013		April 29, 2012
	(in millions)
Prepaids and other current assets	$	66.5	$	19.9	$	57.4
Other assets	—		—		3.2
Deferred income taxes, net	745.9		205.8		290.8

Management makes an assessment to determine if its deferred tax assets are more likely than not to be realized. Valuation allowances are established in the event that management believes the related tax benefits will not be realized. The valuation allowance primarily relates to state credits, state net operating loss carryforwards and losses in foreign jurisdictions for which no tax benefit was recognized. During the Successor Period, the valuation allowance increased by $4.6 million which is primarily the net of purchase price allocations related to the Merger and the utilization of tax losses in foreign jurisdictions. During the Predecessor Period, the valuation allowance decreased by $5.8 million resulting primarily from the utilization of tax losses in foreign jurisdictions.

The tax credits, carryforwards and net operating losses expire from fiscal 2014 to 2033.

There were foreign subsidiary net earnings that were considered permanently reinvested of $17.0 million, $149.5 million and $123.6 million as of December 29, 2013, April 28, 2013 and April 29, 2012, respectively. It is not reasonably determinable as to the amount of deferred tax liability that would need to be provided if such earnings were not reinvested. Included in the deferred tax liability for investments in subsidiaries are amounts that may potentially reverse in the near future because of a proposed restructuring.

A reconciliation of the beginning and ending liability for unrecognized tax benefits is as follows:



	(in millions)
Balance, May 1, 2011	$	33.6
Additions for tax positions taken in the current year	2.4
Additions for tax positions taken in prior years	(10.8		)
Settlements with taxing authorities	(9.3		)
Lapse of statute of limitations	(0.6		)
Balance, April 29, 2012	15.3
Additions for tax positions taken in the current year	3.9
Reduction for tax positions taken in prior years	(1.8		)
Settlements with taxing authorities	(1.0		)
Lapse of statute of limitations	(0.7		)
Balance, April 28, 2013	15.7
Additions for tax positions taken in the current year	1.6
Reduction for tax positions taken in prior years	(0.2		)
Settlements with taxing authorities	(2.1		)
Lapse of statute of limitations	(1.1		)
Balance, December 29, 2013	$	13.9

We operate in multiple taxing jurisdictions, both within the U.S. and outside of the U.S., and are subject to examination from various tax authorities. The liability for unrecognized tax benefits included $4.5 million, $5.1 million and $4.7 million of accrued interest as of December 29, 2013, April 28, 2013 and April 29, 2012, respectively. We recognized $0.5 million of net interest income during the Transition Period, $0.4 million of net interest expense during fiscal year ended April 28, 2013 and $3.5 million and $0.1 million of net interest income during fiscal year ended April 29, 2012 and fiscal year ended May 1, 2011, respectively, in income tax expense. The liability for unrecognized tax benefits included $13.3 million as of December 29, 2013, $14.9 million as of April 28, 2013 and $14.1 million as of April 29, 2012, that if recognized, would impact the effective tax rate.

We are currently being audited in several tax jurisdictions and remain subject to examination until the statute of limitations expires for the respective tax jurisdiction. Within specific countries, we may be subject to audit by various tax authorities, or subsidiaries operating within the country may be subject to different statute of limitations expiration dates. We have concluded all U.S. federal income tax matters through fiscal 2013. We are currently under U.S federal examination for the tax year ended December 29, 2013.

Based upon the expiration of statutes of limitations and/or the conclusion of tax examinations in several jurisdictions as of December 29, 2013, we believe it is reasonably possible that the total amount of previously unrecognized tax benefits may decrease by up to $2.2 million within twelve months of December 29, 2013