| Income Tax Disclosure [Text Block] | Income Taxes Domestic and foreign components of income before income taxes were as follows: Year Ended October 3, September 28, September 29, (In thousands) Domestic $ 96,993 $ 153,696 $ 16,215 Foreign 103,765 91,923 81,324 Total $ 200,758 $ 245,619 $ 97,539 The provision for income taxes consists of the following: Year Ended October 3, September 28, September 29, (In thousands) Federal: Current $ (917) $ 868 $ (122) Deferred 9,460 45,910 170,994 State: Current 1,705 2,747 32 Deferred 2,579 2,961 (3,672) Foreign: Current 46,376 45,929 20,287 Deferred 1,842 5,689 5,553 Total provision for income taxes $ 61,045 $ 104,104 $ 193,072 Impact of U.S. Tax Reform On December 22, 2017, the U.S. Tax Cuts and Jobs Act (the “Tax Act”) was enacted into law. In accordance with ASC 740, Income Taxes , the Company is required to recognize the effect of the Tax Act in the period of enactment, which was the Company’s first quarter of fiscal 2018 that ended on December 30, 2017. The many changes in the Tax Act include a permanent reduction in the maximum federal corporate income tax rate from 35% to 21% effective as of January 1, 2018. Because of this reduction in rate, the Company was required to revalue its U.S. deferred tax assets and liabilities to the new rate in the Company's first quarter of 2018. The Tax Act also required a mandatory deemed repatriation of undistributed earnings and profits, at the rate of either 15.5% for cash or 8% for non-liquid assets. The Tax Act also includes provisions for Global Intangible Low-Taxed Income (“GILTI”), which imposes taxes on foreign income in excess of a deemed return on tangible assets of foreign corporations. These new provisions were effective for the Company in fiscal year 2019. During the first quarter of 2019, the Company elected to record the effects of GILTI as a period cost. The Company's provision for income taxes for 2020, 2019 and 2018 was $61 million (30% of income before taxes), $104 million (42% of income before taxes) and $193 million (198% of income before taxes), respectively. The effective tax rate for 2020 is higher than the expected U.S. statutory rate of 21% primarily due to foreign operations that are taxed at rates higher than the U.S. statutory rate. During 2019, the Company recorded $22 million of deferred tax expense for a tax-related restructuring transaction. During 2018, the Company recorded a net income tax expense for the impact of the Tax Act of $161 million, which was comprised of $175 million for remeasurement of the Company’s U.S deferred tax assets, zero for the mandatory deemed repatriation of undistributed earnings and profits, and a tax benefit of $14 million for the conversion to a territorial system. The tax effects of temporary differences that give rise to significant portions of deferred tax assets and liabilities are as follows: As of October 3, 2020 September 28, 2019 (In thousands) Deferred tax assets: U.S. net operating loss carryforwards $ 168,570 $ 184,188 Foreign net operating loss carryforwards 111,418 117,403 Intangibles 22,684 19,422 Accruals not currently deductible 49,022 45,117 Property, plant and equipment 24,545 28,710 Tax credit carryforwards 15,948 13,601 Reserves not currently deductible 13,389 15,266 Stock compensation expense 6,519 10,249 Federal benefit of foreign operations 16,973 14,006 Derivatives and other impacts of OCI 10,793 3,145 Lease deferred tax asset 10,929 — Other 3,063 2,744 Valuation allowance (111,127) (115,998) Total deferred tax assets 342,726 337,853 Deferred tax liabilities on undistributed earnings (16,240) (18,690) Deferred tax liabilities on branch operations (32,351) (34,378) Revenue recognition (14,258) (9,456) Lease deferred tax liability (10,781) — Net deferred tax assets $ 269,096 $ 275,329 Recorded as: Deferred tax assets $ 273,470 $ 279,803 Deferred tax liabilities (4,374) (4,474) Net deferred tax assets $ 269,096 $ 275,329 The Company offsets deferred tax assets and liabilities by tax-paying jurisdiction. The resulting net amounts by tax jurisdiction are then aggregated without further offset. A valuation allowance is established or maintained when, based on currently available information and other factors, it is more likely than not that all or a portion of the deferred tax assets will not be realized. The Company regularly assesses its valuation allowance against deferred tax assets on a jurisdiction by jurisdiction basis. The Company considers all available positive and negative evidence, including future reversals of temporary differences, projected future taxable income, tax planning strategies and recent financial results. Significant judgment is required in assessing the Company's ability to generate revenue, gross profit, operating income and jurisdictional taxable income in future periods. The Company's valuation allowance as of October 3, 2020 relates primarily to foreign net operating losses, with the exception of $15 million related to U.S. state net operating losses. The Company provides deferred tax liabilities for the tax consequences associated with the undistributed earnings that are expected to be repatriated to subsidiaries' parent unless the subsidiaries' earnings are considered indefinitely reinvested. As of October 3, 2020, income taxes and foreign withholding taxes have not been provided for approximately $363 million of cumulative undistributed earnings of several non-U.S. subsidiaries. The Company intends to reinvest these earnings indefinitely in operations outside of the U.S. Determination of the amount of unrecognized deferred tax liabilities on these undistributed earnings is not practicable. As of October 3, 2020, the Company has cumulative net operating loss carryforwards for federal, state and foreign tax purposes of $700 million, $376 million and $505 million, respectively. The federal and state net operating loss carryforwards begin expiring in 2025 and 2021, respectively, and expire at various dates through September 29, 2035. Certain foreign net operating losses start expiring in 2021. However, the majority of foreign net operating losses carryforward indefinitely. As of October 3, 2020, the Company has federal tax credits of $13 million that expire between 2031 and 2040. The Tax Reform Act of 1986 and similar state provisions impose restrictions on the utilization of net operating loss and tax credit carryforwards in the event of an “ownership change” as defined in the Internal Revenue Code. The utilization of certain net operating losses may be restricted due to changes in ownership and business operations. Following is a reconciliation of the statutory federal tax rate to the Company's effective tax rate: Year Ended October 3, September 28, September 29, Federal tax at statutory tax rate 21.00 % 21.00 % 24.50 % Tax Act impact — — 165.16 Effect of foreign operations 9.41 9.30 7.92 Permanent items (0.59) 0.40 (1.37) Discrete charge for restructuring transaction — 8.88 — Federal credits (1.31) (0.07) (1.28) Other (0.06) 0.68 1.77 State income taxes, net of federal benefit 1.96 2.19 1.24 Effective tax rate 30.41 % 42.38 % 197.94 % A reconciliation of the beginning and ending amount of total liabilities for unrecognized tax benefits, excluding accrued penalties and interest, is as follows: Year Ended October 3, September 28, September 29, (In thousands) Balance, beginning of year $ 66,677 $ 60,787 $ 67,022 Increase (decrease) related to prior year tax positions 1,327 (1,731) (5,917) Increase related to current year tax positions 9,907 8,902 8,392 Settlements — (626) (7,648) Decrease related to lapse of applicable statute of limitations (3,299) (655) (1,062) Balance, end of year $ 74,612 $ 66,677 $ 60,787 The Company had reserves of $40 million and $39 million as of October 3, 2020 and September 28, 2019, respectively, for the payment of interest and penalties relating to unrecognized tax benefits. During 2020 and 2019, the Company recognized a net income tax expense for interest and penalties of $1 million in each year compared to a net income tax benefit of $3 million in 2018. The Company recognizes interest and penalties related to liabilities for unrecognized tax benefits as a component of income tax expense. Should the Company be able to ultimately recognize all of these uncertain tax positions, it would result in a benefit to net income and a reduction of the effective tax rate of $68 million, $62 million and $58 million for years 2020, 2019 and 2018, respectively. The Company conducts business globally and, as a result, files income tax returns in the United States federal jurisdiction and various state and foreign jurisdictions. In the normal course of business, the Company is subject to examination by taxing authorities throughout the world. The Company is currently being audited by the Internal Revenue Service for tax years 2008 through 2010. To the extent the final tax liabilities are different from the amounts accrued, this would result in an increase or decrease in net operating loss carryforwards which would impact tax expense. Additionally, the Company is being audited by various state tax agencies and certain foreign countries. To the extent the final tax liabilities are different from the amounts accrued, the increases or decreases would be recorded as income tax expense or benefit in the consolidated statements of operations. Although the Company believes that the resolution of these audits will not have a material adverse impact on the Company’s results of operations, the outcome is subject to uncertainty. |
