XML 29 R13.htm IDEA: XBRL DOCUMENT
v3.22.4

Income Taxes | 12 Months Ended
--- | ---
Dec. 31, 2022
Income Tax Disclosure [Abstract] |
Income Taxes | 5. Income Taxes The Company’s income tax provision (benefit) consists of the following:
|  | Fiscal Year Ended |
|  | December 31, 2022 |  |  | December 25, 2021 |  |  | December 26, 2020 |
U.S. federal: |  |  |  |  |  |  |  |  |
Current |  | $ | 45,639 |  |  | $ | (13,096 | ) |  | $ | (25,220 | )
Deferred |  |  | (149,734 | ) |  |  | (42,625 | ) |  |  | (7,115 | )
|  | $ | (104,095 | ) |  | $ | (55,721 | ) |  | $ | (32,335 | )
U.S. state: |  |  |  |  |  |  |  |  |
Current |  | $ | 12,870 |  |  | $ | (5,876 | ) |  | $ | (3,931 | )
Deferred |  |  | (29,160 | ) |  |  | (8,132 | ) |  |  | 2,715 |
|  | $ | (16,290 | ) |  | $ | (14,008 | ) |  | $ | (1,216 | )
Foreign: |  |  |  |  |  |  |  |  |
Current |  | $ | 175,335 |  |  | $ | 149,012 |  |  | $ | 133,622 |
Deferred |  |  | 36,439 |  |  |  | 45,313 |  |  |  | 11,015 |
|  | $ | 211,774 |  |  | $ | 194,325 |  |  | $ | 144,637 |
Total |  | $ | 91,389 |  |  | $ | 124,596 |  |  | $ | 111,086 |
The income tax provision differs from the amount computed by applying the U.S. statutory federal income tax rate to income before taxes. The sources and tax effects of the differences, including the impact of establishing tax contingency accruals, are as follows:
|  | Fiscal Year Ended |
|  | December 31, 2022 |  |  | December 25, 2021 |  |  | December 26, 2020 |
Federal income tax expense at U.S. statutory rate |  | $ | 223,658 |  |  | $ | 253,429 |  |  | $ | 231,718 |
State income tax (benefit) expense, net of federal tax effect |  |  | (21,064 | ) |  |  | (12,198 | ) |  |  | (3,404 | )
Foreign-derived intangible income (FDII) deduction |  |  | (12,343 | ) |  |  | — |  |  |  | — |
Foreign tax rate differential |  |  | (114,599 | ) |  |  | (117,586 | ) |  |  | (98,130 | )
Other foreign taxes less incentives and credits |  |  | 24,273 |  |  |  | 29,240 |  |  |  | 3,446 |
Withholding tax |  |  | 27,041 |  |  |  | 22,992 |  |  |  | 17,026 |
Net change in uncertain tax positions |  |  | (14,381 | ) |  |  | (17,087 | ) |  |  | (21,391 | )
U.S. federal research and development credit |  |  | (29,384 | ) |  |  | (22,764 | ) |  |  | (21,342 | )
Share-based compensation |  |  | 30 |  |  |  | (6,362 | ) |  |  | (6,114 | )
Switzerland tax reform - tax assets |  |  | 7,168 |  |  |  | (177 | ) |  |  | 11,016 |
Other, net |  |  | 990 |  |  |  | (4,891 | ) |  |  | (1,739 | )
Income tax expense |  | $ | 91,389 |  |  | $ | 124,596 |  |  | $ | 111,086 |
The Company recorded income tax expense of $91,389 in the year ended December 31, 2022, which included income tax expense of $7,168 recognized by the Company in the fourth quarter of 2022 related to the revaluation of certain Switzerland tax assets related to the Switzerland tax reform transitional measures. The Company recorded income tax expense of $124,596 in the year ended December 25, 2021. The Company recorded income tax expense of $111,086 in the year ended December 26, 2020, which included a $14,308 income tax benefit recognized by the Company in the second quarter of 2020 due to the release of uncertain tax position reserves associated with a 2014 intercompany restructuring and was partially offset by income tax expense of $11,016 recognized by the Company in the fourth quarter of 2020 related to the revaluation of certain Switzerland tax assets related to the Switzerland tax reform transitional measures. The Company’s statutory federal and cantonal income tax rate in Switzerland, the Company's place of incorporation, was approximately 14% in fiscal years 2022, 2021, and 2020. If the Company reconciled taxes at the Swiss holding company federal statutory tax rate to the reported income tax expense for 2022 as presented above, the amounts related to tax at the statutory rate would be approximately $77,000 lower, or $147,000, and the foreign tax rate differential would be adjusted by a similar amount to approximately $33,000. For 2021, the amounts related to tax at the statutory rate would be approximately $84,000 lower, or $169,000, and the foreign tax rate differential would be adjusted by a similar amount to approximately $28,000. For 2020, the amounts related to tax at the statutory rate would be approximately $77,000 lower, or $155,000, and the foreign tax rate differential would be adjusted by a similar amount to approximately $20,000. All other amounts would remain substantially unchanged. The Company’s income before income taxes attributable to non-U.S. operations was $1,287,794, $1,227,666, and $1,059,074, for the years ended December 31, 2022, December 25, 2021, and December 26, 2020, respectively. Income taxes of $45,459, $50,127, and $47,236 at December 31, 2022, December 25, 2021, and December 26, 2020, respectively, have not been accrued by the Company for the unremitted earnings of several of its foreign subsidiaries because such earnings are intended to be reinvested in the subsidiaries indefinitely. 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 Company’s deferred tax assets and liabilities are as follows:
|  | December 31, 2022 |  |  | December 25, 2021 |
Deferred tax assets: |  |  |  |  |  |
Product warranty accruals |  | $ | 12,111 |  |  | $ | 10,578 |
Accrued vacation |  |  | 14,986 |  |  |  | 14,073 |
Share-based compensation |  |  | 8,667 |  |  |  | 12,000 |
Tax credit carryforwards |  |  | 19,950 |  |  |  | 24,508 |
Intangible assets |  |  | 156,702 |  |  |  | 173,468 |
Capitalized research & development expenses |  |  | 231,429 |  |  |  | 53,827 |
Net operating losses |  |  | 4,955 |  |  |  | 9,069 |
Operating leases |  |  | 30,310 |  |  |  | 13,685 |
Deferred revenue |  |  | 18,327 |  |  |  | 20,970 |
Tax basis in excess of book basis for investments |  |  | 27,227 |  |  |  | 4,321 |
Other |  |  | 18,259 |  |  |  | 20,220 |
Valuation allowance related to loss carryforward and tax credits |  |  | (17,077 | ) |  |  | (19,709 | )
|  | $ | 525,846 |  |  | $ | 337,010 |
Deferred tax liabilities: |  |  |  |  |  |
Fixed assets |  |  | 40,526 |  |  |  | 27,970 |
Operating leases |  |  | 29,756 |  |  |  | 13,322 |
Prepaid and perpetual license assets |  |  | 11,798 |  |  |  | 17,350 |
Book basis in excess of tax basis for acquired entities |  |  | 21,970 |  |  |  | 32,907 |
Withholding tax |  |  | 108,692 |  |  |  | 89,285 |
Other |  |  | 1,998 |  |  |  | 13,566 |
|  | $ | 214,740 |  |  | $ | 194,400 |
Net deferred tax assets |  | $ | 311,106 |  |  | $ | 142,610 |
Deferred tax assets related to capitalized research and development expenses increased as of December 31, 2022 as compared to December 25, 2021 by $177,602, primarily related to the 2017 United States Tax Cuts and Jobs Act, which included provisions that became effective during 2022 tax year that require us to capitalize certain research and development costs and amortize those capitalized costs on our U.S. tax returns over a period of five or fifteen years, depending on where the associated costs were incurred. At December 31, 2022, the Company had $19,950 of tax credit carryover compared to $24,508 at December 25, 2021. At December 31, 2022, the Company had a deferred tax asset of $4,955 related to the future tax benefit of net operating loss (NOL) carryforwards of $16,296. Included in the NOL carryforwards is $10,530 that relates to Luxembourg and expires beginning in 2037, $707 that relates to Finland and expires in varying amounts between 2025 and 2029, $575 that relates to the Netherlands and expires in 2026, $39 that relates to Thailand and expires in 2025, and $4,445 that relates to various other jurisdictions and has no expiration date. The Company has recorded a valuation allowance for a portion of its deferred tax asset relating to various tax attributes that it does not believe are more likely than not to be realized. In the future, if the Company determines, based on existence of sufficient evidence, that it should realize more or less of its deferred tax assets, an adjustment to the valuation allowance will be made in the period such a determination is made. The total amount of gross unrecognized tax benefits, as of December 31, 2022 was $30,795. A reconciliation of the beginning and ending amount of gross unrecognized tax benefits for years ended December 31, 2022, December 25, 2021, and December 26, 2020 is as follows:
|  | December 31, 2022 |  |  | December 25, 2021 |  |  | December 26, 2020 |
Balance beginning of year |  | $ | 65,216 |  |  | $ | 84,985 |  |  | $ | 101,251 |
Additions based on tax positions related to prior years |  |  | — |  |  |  | — |  |  |  | 10,480 |
Reductions based on tax positions related to prior years |  |  | (6,363 | ) |  |  | (4,727 | ) |  |  | (4,169 | )
Additions based on tax positions related to current period |  |  | 2,368 |  |  |  | 4,272 |  |  |  | 16,859 |
Reductions related to settlements with tax authorities |  |  | (15,476 | ) |  |  | — |  |  |  | (935 | )
Expiration of statute of limitations |  |  | (14,950 | ) |  |  | (19,314 | ) |  |  | (38,501 | )
Balance at end of year |  | $ | 30,795 |  |  | $ | 65,216 |  |  | $ | 84,985 |
Accounting guidance requires unrecognized tax benefits to be classified as noncurrent liabilities, except for the portion that is expected to be paid within one year of the balance sheet date. The balance of net unrecognized benefits of $29,159, $54,443, and $81,938 are required to be classified as noncurrent at December 31, 2022, December 25, 2021, and December 26, 2020, respectively. The net unrecognized tax benefits, if recognized, would reduce the effective tax rate. None of the unrecognized tax benefits are due to uncertainty in the timing of deductibility. Interest and penalties, if any, accrued on the unrecognized tax benefits are reflected in income tax expense. At December 31, 2022, December 25, 2021, and December 26, 2020, the Company had accrued approximately $2,751, $4,225, and $5,666, respectively, for interest. The interest component of the reserve decreased income tax expense for the years ending December 31, 2022, December 25, 2021, and December 26, 2020 by $1,474, and $1,441, and $1,970, respectively. The Company did no t have significant amounts accrued for penalties for the years ending December 31, 2022, December 25, 2021, and December 26, 2020. The Company files income tax returns in Switzerland, Taiwan, United Kingdom, U.S. federal jurisdiction, as well as various states, local, and foreign jurisdictions. In its major tax jurisdictions, Switzerland, Taiwan, United Kingdom, and U.S. federal and various states, the Company is no longer subject to income tax examinations by tax authorities, with few exceptions, for years prior to 2018, 2017, 2020, and 2019, respectively. The Company recognized a reduction of income tax expense, inclusive of interest and net of deferrals, of $12,749, $22,221, and $42,185 in fiscal years ended December 31, 2022, December 25, 2021, and December 26, 2020, respectively, to reflect the expiration of statutes of limitations and releases due to audit settlement in various jurisdictions. The Company believes that it is reasonably possible that approximately $5,000 to $15,000 of its reserves for certain unrecognized tax benefits will decrease within the next 12 months as the result of the expiration of statutes of limitations. This potential decrease in unrecognized tax benefits would impact the Company’s effective tax rate within the next 12 months.

X
- References No definition available. + Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI https://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI https://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration