Income Taxes

12 Months Ended

Oct. 31, 2021

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The components of the Provision for Income Taxes are as follows: 

(in thousands)	2021		2020		2019
Current
U.S. Federal	$	171,732	$	142,708	$	161,233
State	7,541		13,353		30,774
Foreign	9,079		18,293		9,919
Total Current	188,352		174,354		201,926
Deferred
U.S. Federal	23,507		34,408		27,817
State	2,220		4,937		1,473
Foreign	2,950		(7,306)		(649)
Total Deferred	28,677		32,039		28,641
Total Provision for Income Taxes	$	217,029	$	206,393	$	230,567

The Company has elected to treat global intangible low taxed income (GILTI) as a period cost.

Deferred Income Taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the deferred income tax liabilities and assets are as follows: 

(in thousands)	October 31, 2021		October 25, 2020
Deferred Tax Liabilities
Goodwill and Intangible Assets	$	(322,822)	$	(269,218)
Tax over Book Depreciation and Basis Differences	(143,891)		(164,911)
Other, net	(21,967)		(24,316)
Deferred Tax Assets
Pension and Other Post-retirement Benefits	71,190		97,129
Employee Compensation Related Liabilities	68,133		65,024
Marketing and Promotional Accruals	22,916		20,783
Other, net	50,767		62,302
Net Deferred Tax (Liabilities) Assets	$	(275,674)	$	(213,207)

Reconciliation of the statutory federal income tax rate to the Company’s effective tax rate is as follows: 

	2021		2020		2019
U.S. Statutory Rate	21.0	%	21.0	%	21.0	%
State Taxes on Income, Net of Federal Tax Benefit	0.8		1.6		2.5
Divestitures	—		—		(1.4)
Stock-based Compensation	(1.6)		(3.1)		(2.2)
All Other, net	(0.9)		(1.0)		(0.8)
Effective Tax Rate	19.3	%	18.5	%	19.1	%

In fiscal 2019, the Company recorded a net tax benefit of $17.5 million related to the divestiture of CytoSport.

As of October 31, 2021, the Company had $221.4 million of undistributed earnings from non-U.S. subsidiaries. The Company maintains all earnings are permanently reinvested. Accordingly, no additional income taxes have been provided for withholding tax, state tax, or other taxes.

Total income taxes paid during fiscal years 2021, 2020, and 2019 were $167.0 million, $169.7 million, and $221.4 million, respectively.

The following table sets forth changes in the unrecognized tax benefits, excluding interest and penalties, for fiscal years 2021 and 2020. 

(in thousands)
Balance as of October 27, 2019	$	27,826
Tax Positions Related to the Current Period
Increases	3,177
Tax Positions Related to Prior Periods
Increases	8,299
Decreases	(2,549)
Settlements	(1,107)
Decreases Related to a Lapse of Applicable Statute of Limitations	(2,404)
Balance as of October 25, 2020	$	33,242
Tax Positions Related to the Current Period
Increases	4,003
Tax Positions Related to Prior Periods
Increases	2,117
Decreases	(4,170)
Settlements	(8,934)
Decreases Related to a Lapse of Applicable Statute of Limitations	(4,166)
Balance as of October 31, 2021	$	22,092

The amount of unrecognized tax benefits, including interest and penalties, is recorded in Other Long-term Liabilities. If recognized as of October 31, 2021, and October 25, 2020, $19.6 million, and $29.1 million, respectively, would impact the Company’s effective tax rate. The Company includes accrued interest and penalties related to uncertain tax positions in income tax expense, with losses of $0.9 million and $1.9 million included in expense for fiscal 2021 and 2020, respectively. The amount of accrued interest and penalties at October 31, 2021, and October 25, 2020, associated with unrecognized tax benefits was $5.0 million and $7.2 million, respectively.

The Company is regularly audited by federal and state taxing authorities. The U.S. Internal Revenue Service (I.R.S.) concluded their examinations of fiscal 2018 in the fourth quarter of fiscal 2020, and fiscal 2019 in the second quarter of fiscal 2021. The Company has elected to participate in the Compliance Assurance Process (CAP) for fiscal years through 2022. The objective of CAP is to contemporaneously work with the I.R.S. to achieve federal tax compliance and resolve all or most of the issues prior to filing of the tax return. The Company may elect to continue participating in CAP for future tax years; the Company may withdraw from the program at any time.

The Company is in various stages of audit by several state taxing authorities on a variety of fiscal years, as far back as 2015. While it is reasonably possible that one or more of these audits may be completed within the next 12 months and the related unrecognized tax benefits may change based on the status of the examinations, it is not possible to reasonably estimate the effect of any amount of such change to previously recorded uncertain tax positions.