Income Taxes (Tables)

12 Months Ended

Nov. 28, 2021

Schedule of effective income tax rate reconciliation

The Company's income tax (benefit) expense differed from the amount computed by applying the U.S. federal statutory income tax rate to income before income taxes as follows:


	Year Ended
	November 28, 2021				November 29, 2020				November 24, 2019

	(Dollars in thousands)
Income tax expense at U.S. federal statutory rate	$	121,851	21.0	%	$	(39,855)	21.0	%	$	100,293	21.0	%
State income taxes, net of U.S. federal impact	9,012		1.6	%	(5,246)		2.8	%	4,496		1.0	%
Change in valuation allowance	2,573		0.4	%	18,271		(9.6)	%	(81)		—	%
Impact of foreign operations, net(1)	(3,650)		(0.6)	%	(8,868)		4.7	%	7,132		1.5	%
Foreign-derived intangible income benefit ("FDII")	(65,955)		(11.4)	%	—		—	%	(11,918)		(2.5)	%
Reassessment of tax liabilities	(768)		(0.1)	%	(1,531)		0.7	%	(6,480)		(1.4)	%
Stock-based compensation	(36,871)		(6.4)	%	(22,332)		11.8	%	(15,730)		(3.3)	%

Other, including non-deductible expenses	507		0.1	%	1,547		(0.8)	%	4,892		1.0	%
Change in tax law	—		—	%	(4,628)		2.4	%	—		—	%
Total	$	26,699	4.6	%	$	(62,642)	33.0	%	$	82,604	17.3	%

___________

(1)Included in the Impact of foreign operations, net are foreign rate differential, Global Intangible Low-Taxed Income ("GILTI") and the tax impact of actual and deemed repatriations of foreign earnings net of foreign tax credits. Fiscal year 2021 also included $15.2 million of net tax benefits related to an international intellectual property transaction.

Schedule of income before income tax, domestic and foreign

The U.S. and foreign components of income before income taxes were as follows:


	Year Ended
	November 28, 2021		November 29, 2020		November 24, 2019

	(Dollars in thousands)
Domestic	$	197,460	$	(197,718)	$	120,692
Foreign	382,780		7,935		356,892
Total income before income taxes	$	580,240	$	(189,783)	$	477,584

Schedule of components of income tax expense (benefit)

Income tax expense consisted of the following:


	Year Ended
	November 28, 2021		November 29, 2020		November 24, 2019

	(Dollars in thousands)
U.S. Federal
Current	$	12,885	$	8,396	$	13,182
Deferred	(25,454)		(79,676)		(22,319)
	$	(12,569)	$	(71,280)	$	(9,137)
U.S. State
Current	$	7,845	$	978	$	(2,939)
Deferred	1,167		(6,435)		1,002
	$	9,012	$	(5,457)	$	(1,937)
Foreign
Current	$	93,914	$	23,228	$	87,324
Deferred	(63,658)		(9,133)		6,354
	$	30,256	$	14,095	$	93,678
Consolidated
Current	$	114,644	$	32,602	$	97,567
Deferred	(87,945)		(95,244)		(14,963)
Total income tax expense	$	26,699	$	(62,642)	$	82,604

Schedule of deferred tax assets and liabilities

The Company's deferred tax assets and deferred tax liabilities were as follows:


	November 28, 2021		November 29, 2020

	(Dollars in thousands)
Deferred tax assets
Foreign tax credit carryforwards	$	147,817	$	232,164
State net operating loss carryforwards	12,171		16,054
Foreign net operating loss carryforwards	53,320		58,644
Employee compensation and benefit plans	107,502		102,846
Advance royalties	114,451		10,021
Accrued liabilities	19,301		32,304
Sales returns and allowances	33,958		30,740
Inventory	26,160		25,380
Property, plant and equipment	65,601		—
Unrealized foreign exchange gains or losses	4,099		18,665
Lease liability	284,591		251,285
Other	22,089		17,898
Total gross deferred tax assets	891,060		796,001
Less: Valuation allowance	(45,971)		(38,543)
Deferred tax assets, net of valuation allowance	845,089		757,458
Deferred tax liabilities
U.S. Branches	(31,140)		(25,330)
Residual tax liability on unremitted foreign earnings	(137)		(7,940)
Property, plant and equipment	—		(4,531)
Right of use asset	(256,606)		(227,054)
Total deferred tax liabilities	(287,883)		(264,855)
Total net deferred tax assets	$	557,206	$	492,603

Summary of valuation allowance

The following table details the changes in valuation allowance during the year ended November 28, 2021:


	Valuation Allowance at November 29, 2020		Changes in Related Gross Deferred Tax Asset		Change / (Release)		Valuation Allowance at November 28, 2021

	(Dollars in thousands)
Foreign tax credit and U.S. state net operating loss carryforwards	$	8,048	$	1,201	$	—	$	9,249
Foreign net operating loss carryforwards and other foreign deferred tax assets	30,495		3,654		2,573		36,722
	$	38,543	$	4,855	$	2,573	$	45,971

Schedule of unrecognized tax benefits roll forward

The following table reflects the changes to the Company's unrecognized tax benefits for the year ended November 28, 2021 and November 29, 2020:


	November 28, 2021		November 29, 2020

	(Dollars in thousands)
Unrecognized tax benefits beginning balance	$	32,286	$	36,559
Increases related to current year tax positions	1,157		1,575
Increases related to tax positions from prior years	11		262
Decreases related to tax positions from prior years	(1,709)		(889)
Settlement with tax authorities	(446)		(4,322)
Lapses of statutes of limitation	(396)		(446)
Other, including foreign currency translation	(249)		(453)
Unrecognized tax benefits ending balance	$	30,654	$	32,286