Income Taxes (Tables)

12 Months Ended

Sep. 30, 2016

Schedule of Components of Income from Continuing Operations before Income Taxes

The Domestic and International components of income from continuing operations before income taxes were as follows⁽¹⁾:



	2016			2015			2014
Domestic	$	(275.3	)	$	(107.5	)	$	(76.0	)
International	508.7			214.8			41.4
Total	$	233.4		$	107.3		$	(34.6	)

(1) Domestic reflects U.K. in fiscal 2016 and 2015, and U.S. federal and state in fiscal 2014.

Schedule of Significant Components of Income Taxes Related to Continuing Operations

Significant components of income taxes related to continuing operations are as follows⁽¹⁾:



	2016			2015			2014
Current:
Domestic	$	0.3		$	0.2		$	22.3
International	120.5			67.3			18.9
Current income tax provision	120.8			67.5			41.2
Deferred:
Domestic	$	0.7		$	(0.8	)	$	(41.9	)
International	(377.1		)	(196.0		)	(11.9		)
Deferred income tax (benefit)	(376.4		)	(196.8		)	(53.8		)
	$	(255.6	)	$	(129.3	)	$	(12.6	)

(1)

Schedule of Reconciliation of Income Taxes at Statutory Rate and Tax Provision

The reconciliation between Domestic income taxes at the statutory rate and the Company's provision for income taxes on continuing operations is as follows:



	2016			2015			2014
Provision for income taxes at Domestic statutory income tax rate ⁽¹⁾	$	46.6		$	21.4		$	(12.1	)
Adjustments to reconcile to income tax provision:
U.S. state income tax provision, net ⁽⁵⁾	—			—			(7.0		)
Rate difference between Domestic and International jurisdictions ⁽²⁾	(249.3		)	(152.9		)	(14.2		)
U.S. manufacturing deduction ⁽⁵⁾	—			—			(2.7		)
Valuation allowances, nonrecurring	2.1			(2.1		)	0.1
Adjustments to accrued income tax liabilities and uncertain tax positions	(14.9		)	(7.0		)	(0.4		)
Interest and penalties on accrued income tax liabilities and uncertain tax positions	(16.4		)	0.3			(7.7		)
Investment in partnership	—			—			20.0
Credits, principally research and orphan drug ⁽³⁾ ⁽⁴⁾	(33.7		)	(8.1		)	(0.7		)
Permanently nondeductible and nontaxable items	7.9			14.7			13.4
Other	2.1			4.4			(1.3		)
Provision for income taxes	$	(255.6	)	$	(129.3	)	$	(12.6	)


(1)	The statutory tax rate reflects the U.K. statutory tax rate of 20% for fiscal 2016 and 2015, and the U.S. federal statutory tax rate of 35% for fiscal 2014.


(2)	Includes the impact of certain recurring valuation allowances for Domestic and International jurisdictions.


(3)	Due to the December 31, 2013 Research Credit tax law expiration, fiscal 2014 includes $0.7 million for the period September 28, 2013 through December 31, 2013. During fiscal 2015, the legislation was extended, with a retroactive effective date of January 1, 2014. As such, fiscal 2015 includes approximately $3.6 million of credit related to the period January 1, 2014 through September 26, 2014.


(4)	The Company realized a tax benefit of $27.4 million resulting from a U.K. tax credit on a dividend between affiliates.

(5)

For fiscal 2016, U.S. state income tax benefit of $15.1 million was combined with the rate differences between Domestic and International jurisdictions. For fiscal 2015, U.S. state income tax benefit of $34.9 million, and U.S. manufacturing deduction tax benefit of $4.3 million were combined with the rate differences between Domestic and International jurisdictions. Fiscal 2014 includes U.S. state income tax benefit of $4.4 million associated with fiscal 2014 acquisitions and integration thereof.

Schedule of Unrecognized Tax Benefit Activity

The following table summarizes the activity related to the Company's unrecognized tax benefits, excluding interest:



	2016			2015			2014
Balance at beginning of fiscal year	$	89.2		$	82.0		$	100.1
Additions related to current year tax positions	63.8			4.5			3.2
Additions related to prior period tax positions	10.8			19.9			30.6
Reductions related to prior period tax positions	(37.8		)	(7.7		)	(33.0		)
Reductions related to disposition transactions	(6.6		)	—			—
Settlements	(2.6		)	(7.8		)	(6.9		)
Lapse of statute of limitations	(2.0		)	(1.7		)	(12.0		)
Balance at end of fiscal year	$	114.8		$	89.2		$	82.0

Schedule of Unrecongized Tax Benefits Balance Sheet Location

Unrecognized tax benefits, excluding interest, are reported in the following consolidated balance sheet captions in the amount shown:



	September 30, 2016		September 25, 2015
Accrued and other current liabilities	$	—	$	1.3
Other income tax liabilities	55.4		80.0
Deferred income taxes (non-current liability)	59.4		7.9
	$	114.8	$	89.2

Schedule of Income Taxes Payable

Income taxes payable, including uncertain tax positions and related interest accruals, is reported in the following consolidated balance sheet captions in the amounts shown:



	September 30, 2016		September 25, 2015
Accrued and other current liabilities	$	111.8	$	15.6
Other income tax liabilities	67.7		121.3
	$	179.5	$	136.9

Schedule of Income Tax Receivables and Other Assets

At September 30, 2016, other assets included $69.1 million of tax payments associated with non-current deferred intercompany transactions. Prepaid expenses and other current assets includes $10.0 million of tax payments associated with current deferred intercompany transactions, and $43.5 million of receivables associated with tax payments on account with the taxing authorities. At September 25, 2015, other assets includes $51.7 million of tax payments associated with non-current deferred intercompany transactions. Prepaid expenses and other current assets includes a receivable of $81.1 million and tax payments of $8.7 million associated with current deferred intercompany transactions. All of the above items exclude amounts related to assets which are held for sale.



	September 30, 2016		September 25, 2015
Other assets	$	69.1	$	51.7
Prepaid expenses and other current assets	53.5		89.8
	$	122.6	$	141.5

Schedule of Deferred Taxes Activity

The components of the net deferred tax (liability) asset at the end of each fiscal year were as follows:



	September 30, 2016			September 25, 2015
Deferred tax assets:
Accrued liabilities and reserves	$	80.8		$	91.0
Inventories	35.4			21.4
Tax loss and credit carryforwards	332.3			159.5
Environmental liabilities	28.6			23.6
Rebate reserves	48.7			48.1
Expired product	12.2			26.3
Postretirement benefits	48.7			37.3
Federal and state benefit of uncertain tax positions and interest	17.4			33.6
Share-based compensation	22.1			17.6
Intangible assets	341.8			105.7
Other	14.9			8.7
	982.9			572.8
Deferred tax liabilities:
Property, plant and equipment	(111.3		)	(111.8		)
Intangible assets	(775.1		)	(1,550.7		)
Installment sale	(1,902.9		)	(1,465.3		)
Investment in partnership	(186.0		)	(187.9		)
	(2,975.3		)	(3,315.7		)
Net deferred tax (liability) before valuation allowances	(1,992.4		)	(2,742.9		)
Valuation allowances	(564.9		)	(233.0		)
Net deferred tax (liability)	$	(2,557.3	)	$	(2,975.9	)

Schedule of Deferred Taxes Balance Sheet Location

Deferred taxes are reported in the following consolidated balance sheet captions in the amounts shown:



	September 30, 2016			September 25, 2015
Deferred income taxes (current asset)	$	—		$	139.2
Other non-current assets	24.1			6.6
Accrued and other current liabilities	—			(4.2		)
Deferred income taxes (non-current liability)	(2,581.4		)	(3,117.5		)
Net deferred tax (liability)	$	(2,557.3	)	$	(2,975.9	)