Income Taxes (Tables)

12 Months Ended

Oct. 26, 2012

The provision for income taxes for continuing operations included in the Consolidated Statement of Income consisted of the following:


In thousands	2012			2011			2010
Current provision
Federal	$	159,294		$	94,024		$	32,679
State		16,410			7,357			4,889
Foreign		105,073			86,647			91,889

Total current		280,777			188,028			129,457


Deferred provision (benefit)
Federal		74,966			75,663			83,357
State		399			5,567			2,346
Foreign		(18,272	)		(4,427	)		2,365

Total deferred		57,093			76,803			88,068


Total provision for income taxes	$	337,870		$	264,831		$	217,525

Domestic and Foreign Components of Income From Continuing Operations Before Income Taxes

The domestic and foreign components of income from continuing operations before income taxes were as follows:


In thousands	2012		2011		2010
Domestic income	$	724,132	$	531,888	$	386,913
Foreign income		380,999		363,945		292,111

Pre-tax income from continuing operations	$	1,105,131	$	895,833	$	679,024

Income Tax Reconciliation

The reconciliation between the income tax provision recognized in our Consolidated Statement of Income and the income tax provision computed by applying the statutory federal income tax rate to the income from continuing operations are as follows:


In thousands	2012			2011			2010
Income tax computed at federal statutory tax rate		35.0	%		35.0	%		35.0	%
Sub-part F income and foreign dividends, net of foreign tax credits		0.3			(0.9	)		(0.1	)
Differences in foreign and U.S. tax rates		(4.2	)		(4.3	)		(3.7	)
State income taxes, net of federal tax impact		1.0			0.7			0.7
Resolution of prior years’ tax matters		—			0.9			(1.2	)
Valuation allowance		0.1			0.1			0.2
IRC 199 manufacturing deduction		(1.7	)		(1.4	)		(0.8	)
Other items, net		0.1			(0.5	)		1.2

		30.6	%		29.6	%		31.3	%

Net Deferred Tax Asset

The components of the net deferred tax asset are as follows:


In thousands	2012			2011
Deferred tax assets:
Employee benefit related items	$	156,034		$	136,387
Tax credit carryforwards		5,665			26,861
Tax loss carryforwards		122,895			134,088
Inventories		29,952			26,553
Other, net		63,266			20,065
Valuation allowance - Current Assets		(5,281	)		—
Valuation allowance - Other Assets		(117,354	)		(123,052	)

Total deferred tax assets		255,177			220,902

Deferred tax liabilities:
Depreciation and amortization in excess of book expense		56,218			33,114
Other, net		—			11,712
Intangibles		109,788			44,782

Total deferred tax liabilities		166,006			89,608

Net deferred tax asset	$	89,171		$	131,294

The net deferred tax assets are reflected in the accompanying balance sheets as follows:


In thousands	2012			2011

Current deferred tax assets, included in Other current assets	$	90,510		$	74,295
Long-term deferred tax asset		67,101			73,123
Current deferred tax liability, included in Other current liabilities		(2,247	)		(3,001	)
Long-term deferred tax liability, included in Other (non-current liabilities)		(66,193	)		(13,123	)

Net deferred tax asset	$	89,171		$	131,294

Loss and Credit Carryforward Summary

The following table summarizes the components of our loss and credit carryforward.


Loss and Credit Carryforward Summary
	Amount
Description - In millions	Gross		Benefit		Valuation Allowance		Expiration Date(s)

Foreign capital losses		61.9		14.3		14.3		None
U.S. state operating losses		1,952.0		100.7		97.5		Various
Foreign losses		31.0		7.9		7.9	$	3.9 - 2014 to 2017
							$	4.0 - None

Alternative minimum tax credits		N/A		3.2		—		None

State tax credits		N/A		0.4		0.4		2026
Foreign tax credits		N/A		1.5		—	$	1.5 - 2016 to 2018
Various international tax credits		N/A		0.5		0.3		None

Net Unrecognized Tax Benefit

Unrecognized tax benefits are as follows:


In thousands	2012			2011
Balance, beginning of year	$	10,370		$	6,746
Interest included in the beginning balance		(1,271	)		—
Additions for current year tax positions and acquisition		25,735			4,984
Additions for prior year tax positions		167			255
Reductions for prior year tax positions		(1,530	)		(765	)
Reductions for changes in judgments		—			(850	)

Balance, end of year	$	33,471		$	10,370

- Definition

Tabular disclosure of tax positions taken in the tax returns filed or to be filed for which it is more likely than not that the tax position will not be sustained upon examination by taxing authorities (i.e., uncertain tax positions) and other types of income tax contingencies, including: (1) the policy on classification of interest and penalties; (2) a tabular reconciliation of the total amounts of unrecognized tax benefits at the beginning and end of the period; the total amount(s) of: (3) unrecognized tax benefits that, if recognized, would affect the effective tax rate, and (4) interest and penalties recognized in each of the income statement and balance sheet; (5) for positions for which it is reasonably possible that the total amounts unrecognized will significantly change within 12 months of the reporting date the: (i) nature of the uncertainty, (ii) nature of the event that could occur that would cause the change, and (iii) an estimate of the range of the reasonably possible change or a statement that an estimate of the range cannot be made; and (6) a description of tax years that remain subject to examination by major tax jurisdictions.

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