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Income Taxes
 6 Months Ended
Jun. 16, 2022
Income Tax Disclosure [Abstract]  
Income Tax Disclosure
5.Income Taxes
The Company's income tax expense (benefit) was as follows:
Successor
Three Months
Ended
September 29, 2023		Three Months
Ended
September 30, 2022
Current tax expense (benefit)$10.8 $(20.5)
Deferred tax expense (benefit)— (4.4)
Income tax expense (benefit)$10.8 $(24.9)

SuccessorPredecessor
Nine Months
Ended
September 29, 2023		Period from
June 17, 2022
through
September 30, 2022		Period from
January 1, 2022
 through
June 16, 2022
Current tax expense (benefit)$32.6 $(23.8)$(23.9)
Deferred tax expense (benefit)475.5 (10.8)(473.4)
Income tax expense (benefit)$508.1 $(34.6)$(497.3)
As further discussed in Note 1, the Company concluded that there is substantial doubt about its ability to continue as a going concern within one year from the date of issuance of this report. The Company considered this in determining that certain net deferred tax assets were no longer more likely than not realizable. Therefore, a valuation allowance of $475.5 million was placed on the net deferred tax assets as of the beginning of the year. Additionally, a valuation allowance was recorded to offset the current year deferred tax activity, predominately related to intangible asset amortization, accretion expense associated with our settlement obligations and debt, and inventory step-up amortization expense. As a result, all of the Company’s net deferred tax assets as of the nine months ended September 29, 2023 (Successor) are fully offset by a valuation allowance.
The Company recognized income tax expense of $10.8 million and $508.1 million on losses from continuing operations before income taxes of $1,714.1 million and $2,213.9 million for the three and nine months ended September 29, 2023 (Successor), respectively. This resulted in effective tax rates of negative 0.6% and negative 23.0%, respectively. The current income tax expense for both the three and nine months ended September 29, 2023 (Successor) predominately related to a net decrease in prepaid income taxes. The deferred income tax expense for the nine months ended September 29, 2023 (Successor) related to the valuation allowance noted above, recorded against the Company's net deferred tax assets.
The income tax expense of $10.8 million for the three months ended September 29, 2023 (Successor) consisted of $9.3 million attributed to a decrease in prepaid income taxes and $1.5 million predominately attributed to pretax earnings in various jurisdictions.
The income tax expense of $508.1 million for the nine months ended September 29, 2023 (Successor) consisted of the valuation allowance of $475.5 million placed on the net deferred tax assets as of the beginning of the year that were no longer more likely than not realizable, $30.2 million attributed to a decrease in prepaid income taxes and $3.7 million predominately attributed to pretax earnings in various jurisdictions, offset by $1.3 million attributed to the Coronavirus Aid, Relief, and Economic Security ("CARES") Act.
The Company recognized $24.9 million and $34.6 million of income tax benefit on losses from continuing operations before income taxes of $310.2 million, and $383.6 million for the three months ended September 30, 2022 (Successor) and the period from
June 17, 2022 through September 30, 2022 (Successor), respectively. This resulted in effective tax rates of 8.0% and 9.0%, respectively. The current and deferred income tax benefits predominantly related to intangible asset amortization activity attributed to fresh-start adjustments, partially offset by the utilization of loss carryforwards.
The income tax benefits of $24.9 million and $34.6 million for the three months ended September 30, 2022 (Successor) and the period from June 17, 2022 through September 30, 2022 (Successor), respectively, was attributed to pretax earnings in various jurisdictions, separation costs, reorganization items, net and restructuring charges.
The Company recognized $497.3 million of income tax benefit on $811.3 million of loss from continuing operations before income taxes for the period January 1, 2022 through June 16, 2022 (Predecessor). This resulted in an effective tax rate of 61.3%. The income tax benefit for the period from January 1, 2022 through June 16, 2022 (Predecessor) primarily consisted of the income tax impacts from reorganization and fresh-start adjustments, including adjustments to the Company's valuation allowance. For the period January 1, 2022 through June 16, 2022 (Predecessor), the Company recorded an income tax benefit of $497.3 million, primarily for reorganization adjustments in the Predecessor period consisting of (1) $1,231.5 million of tax expense for the reduction in federal and state NOL carryforwards from the cancellation of debt income ("CODI") realized upon emergence and limitations under Sections 382 and 383 of the IRC; (2) $141.3 million of tax expense for the net decrease in deferred tax assets resulting from reorganization adjustments; and (3) $1,270.1 million of tax benefit for the reduction in the valuation allowance on the Company's deferred tax assets; and fresh-start adjustments in the Predecessor period consisting of (4) $297.1 million of tax benefit for the net decrease in deferred tax liabilities resulting from fresh-start adjustments and (5) $285.3 million of tax benefit associated with the release of uncertain tax positions. The remaining tax benefit was attributable to pretax earnings in various jurisdictions during the Predecessor period.
During the nine months ended September 29, 2023 (Successor), net cash refunds for income taxes were $136.3 million, including refunds of $141.6 million received as a result of provisions in the CARES Act and net payments of $5.3 million related to operational activity. During the period June 17, 2022 through September 30, 2022 (Successor) and the period January 1, 2022 through June 16, 2022 (Predecessor), net cash payments for income taxes were $3.8 million and $3.0 million, respectively.
The Company's unrecognized tax benefits, excluding interest, totaled $24.8 million as of both September 29, 2023 (Successor) and December 30, 2022 (Successor). If favorably settled, $15.4 million of unrecognized tax benefits as of September 29, 2023 (Successor) would benefit the effective tax rate. The remaining unrecognized tax benefits are reflected as a write-off of related deferred tax assets. If these unrecognized tax benefits were recognized, the related deferred tax assets would be offset by a valuation allowance. The total amount of accrued interest and penalties related to these obligations was $3.8 million and $2.8 million as of September 29, 2023 (Successor) and December 30, 2022 (Successor), respectively.
Within the next twelve months, the unrecognized tax benefits and the related interest and penalties are not expected to change significantly.
Certain of the Company's subsidiaries continue to be subject to examination by taxing authorities. The earliest open years subject to examination for the U.S federal jurisdiction is 2015, and the earliest open year for state jurisdictions and various foreign jurisdictions, including Ireland, Japan, Luxembourg, Switzerland and the United Kingdom is 2013.