XML 41 R22.htm IDEA: XBRL DOCUMENT v3.24.3
Income Taxes
 12 Months Ended
Sep. 29, 2024
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
Components of earnings before income taxes (in millions):
Fiscal Year EndedSep 29, 2024Oct 1, 2023Oct 2, 2022
United States$4,087.6 $4,488.6 $3,484.9 
Foreign882.0 913.3 747.0 
Total earnings before income taxes$4,969.6 $5,401.9 $4,231.9 
Provision/(benefit) for income taxes (in millions):
Fiscal Year EndedSep 29, 2024Oct 1, 2023Oct 2, 2022
Current taxes:
U.S. federal$681.2 $678.2 $477.6 
U.S. state and local210.9 235.9 164.0 
Foreign328.8 422.4 283.8 
Total current taxes1,220.9 1,336.5 925.4 
Deferred taxes:
U.S. federal10.7 117.0 92.6 
U.S. state and local(0.7)(0.8)10.5 
Foreign(23.6)(175.5)(80.0)
Total deferred taxes(13.6)(59.3)23.1 
Total income tax expense$1,207.3 $1,277.2 $948.5 
Reconciliation of the statutory U.S. federal income tax rate with our effective income tax rate:
Fiscal Year EndedSep 29, 2024Oct 1, 2023Oct 2, 2022
Statutory rate21.0 %21.0 %21.0 %
State income taxes, net of federal tax benefit3.3 3.4 3.3 
Foreign rate differential0.3 0.4 0.3 
Other, net(0.3)(1.2)(2.2)
Effective tax rate24.3 %23.6 %22.4 %
As of September 29, 2024, in certain foreign subsidiaries in which we are partially indefinitely reinvested, the gross taxable temporary difference between the accounting basis and tax basis was approximately $2.6 billion for which there could be up to approximately $260 million of unrecognized tax liability.
Tax effect of temporary differences and carryforwards that comprise significant portions of deferred tax assets and liabilities (in millions):
Sep 29, 2024Oct 1, 2023
Deferred tax assets:
Operating lease liabilities$2,595.1 $2,395.3 
Stored value card liability and deferred revenue1,612.5 1,638.1 
Intangible assets and goodwill 372.6 313.4 
Other692.2 642.3 
Total5,272.4 4,989.1 
Valuation allowance(194.5)(148.6)
Total deferred tax asset, net of valuation allowance5,077.9 4,840.5 
Deferred tax liabilities:
Operating lease, right-of-use assets(2,483.7)(2,291.8)
Property, plant and equipment(580.8)(525.4)
Other(267.8)(268.1)
Total(3,332.3)(3,085.3)
Net deferred tax asset (liability)$1,745.6 $1,755.2 
Reported as:
Deferred income tax assets$1,766.7 $1,769.8 
Deferred income tax liabilities (included in Other long-term liabilities)(21.1)(14.6)
Net deferred tax asset (liability)$1,745.6 $1,755.2 
The valuation allowances as of September 29, 2024, and October 1, 2023, were primarily related to net operating losses and other deferred tax assets of consolidated foreign subsidiaries.
As of September 29, 2024, we had federal net operating loss carryforwards of $76.8 million, which have an indefinite carryforward period, federal tax credit carryforwards of $69.0 million, which will begin to expire in fiscal 2030, and foreign net operating loss carryforwards of $434.8 million, of which $101.2 million have an indefinite carryforward period and the remainder will begin to expire in fiscal 2025.
Uncertain Tax Positions
As of September 29, 2024, we had $108.0 million of gross unrecognized tax benefits, of which $72.1 million, if recognized, would affect our effective tax rate. We recognized expense of $8.8 million, $5.7 million, and $2.3 million of interest and penalties in income tax expense, prior to the benefit of the federal tax deduction, for fiscal 2024, 2023, and 2022, respectively. As of September 29, 2024, and October 1, 2023, we had accrued interest and penalties of $22.5 million and $15.1 million, respectively, on our consolidated balance sheets.
The following table summarizes the activity related to our unrecognized tax benefits (in millions):
Sep 29, 2024Oct 1, 2023Oct 2, 2022
Beginning balance$105.0 $89.7 $82.6 
Increase related to prior year tax positions7.9 1.2 0.2 
Decrease related to prior year tax positions(6.4)(0.4)(0.7)
Increase related to current year tax positions10.3 14.5 9.0 
Decreases related to settlements with taxing authorities(8.8)— — 
Decrease related to lapsing of statute of limitations— — (1.4)
Ending balance$108.0 $105.0 $89.7 
We are currently under examination, or may be subject to examination, by various U.S. federal, state, local, and foreign tax jurisdictions for fiscal 2018 through 2023. We are no longer subject to U.S. federal, U.S. state and local, or material foreign market examinations for years prior to fiscal 2018.
It is reasonably possible that up to approximately $58 million of the Company’s gross unrecognized tax benefits may be recognized by the end of fiscal 2025 for reasons such as a lapse of the statute of limitations or resolution of examinations with tax authorities.