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Income Taxes | 12 Months Ended
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Mar. 31, 2022
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes The income tax provision consists of the following (amounts in millions):
| Fiscal Year Ended March 31,
| 2022 |  | 2021 |  | 2020
Pretax (loss) income: |  |  |  |  |
U.S. | $ | 132.2 |  |  | $ | (301.7) |  |  | $ | (485.2) |
Foreign | 1,350.3 |  |  | 641.2 |  |  | 635.6 |
| $ | 1,482.5 |  |  | $ | 339.5 |  |  | $ | 150.4 |
Current expense (benefit): |  |  |  |  |
U.S. Federal | $ | 191.6 |  |  | $ | 54.8 |  |  | $ | 21.1 |
State | 3.7 |  |  | 2.0 |  |  | 1.0 |
Foreign | (6.2) |  |  | 72.2 |  |  | 48.0 |
Total current expense (benefit) | $ | 189.1 |  |  | $ | 129.0 |  |  | $ | 70.1 |
Deferred expense (benefit): |  |  |  |  |
U.S. Federal | $ | (78.7) |  |  | $ | (215.4) |  |  | $ | (127.8) |
State | (9.1) |  |  | (22.9) |  |  | (13.2) |
Foreign | 95.7 |  |  | 99.4 |  |  | (349.3) |
Total deferred benefit | 7.9 |  |  | (138.9) |  |  | (490.3) |
Total income tax provision (benefit) | $ | 197.0 |  |  | $ | (9.9) |  |  | $ | (420.2) |
The provision for income taxes differs from the amount computed by applying the statutory federal tax rate to income before income taxes. The sources and tax effects of the differences in the total income tax provision are as follows (amounts in millions):
| Fiscal Year Ended March 31,
| 2022 |  | 2021 |  | 2020
Computed expected income tax provision | $ | 311.3 |  |  | $ | 71.3 |  |  | $ | 31.5 |
State income taxes, net of federal benefit | 3.5 |  |  | (3.8) |  |  | (5.4) |
Effects of foreign operations - rate differential | (96.8) |  |  | (37.7) |  |  | (67.4) |
Effects of foreign operations - other, net of foreign tax credits | 139.9 |  |  | 122.5 |  |  | 62.1 |
Foreign-derived intangible income ("FDII") | (27.3) |  |  | (10.5) |  |  | (10.8) |
Business realignment of intellectual property rights | (3.1) |  |  | (63.8) |  |  | (334.8) |
Change in uncertain tax positions | (47.1) |  |  | 28.1 |  |  | (8.4) |
Share-based compensation | (17.6) |  |  | (12.3) |  |  | (11.1) |
R&D tax credits | (49.5) |  |  | (47.6) |  |  | (40.8) |
Income tax holidays | (22.5) |  |  | (11.1) |  |  | (11.4) |
Convertible debt settlement | (25.5) |  |  | (48.1) |  |  | — |
Other | 31.7 |  |  | 16.4 |  |  | 4.9 |
Change in valuation allowance | — |  |  | (13.3) |  |  | (28.6) |
Total income tax provision (benefit) | $ | 197.0 |  |  | $ | (9.9) |  |  | $ | (420.2) |
The foreign tax rate differential benefit primarily relates to the Company's operations in Thailand and Ireland. The Company's Thailand manufacturing operations are currently subject to numerous tax holidays granted to the Company based on its investment in property, plant, and equipment in Thailand. The Company's tax holiday periods in Thailand expire between fiscal 2023 and 2030, however, the Company actively seeks to obtain new tax holidays. The Company does not expect the future expiration of any of its tax holiday periods in Thailand to have a material impact on its effective tax rate. The aggregate dollar benefit derived from these tax holidays approximated $22.5 million and $11.1 million in fiscal 2022 and fiscal 2021, respectively. The impact of the tax holidays during fiscal 2022 increased each of the basic and diluted net income per common share by $0.04. The impact of the tax holidays during fiscal 2021 increased each of the basic and diluted net income per common share by $0.04. The tax effects of temporary differences that give rise to significant portions of the Company's deferred tax assets and deferred tax liabilities are as follows (amounts in millions):
| March 31,
| 2022 |  | 2021
Deferred tax assets: |  |  |
Accrued expenses | $ | 81.6 |  |  | $ | 83.6 |
Capital loss carryforward | 9.8 |  |  | 6.3 |
Deferred revenue | 90.4 |  |  | — |
Income tax credits | 306.6 |  |  | 331.1 |
Intangible assets | 1,479.9 |  |  | 1,581.5 |
Inventory valuation | 26.8 |  |  | 46.0 |
Lease liabilities | 36.1 |  |  | 37.1 |
Net operating loss carryforward | 77.0 |  |  | 68.0 |
Property, plant and equipment | 40.8 |  |  | 32.7 |
Share-based compensation | 45.8 |  |  | 46.5 |
Other | 5.5 |  |  | 17.4 |
Gross deferred tax assets | 2,200.3 |  |  | 2,250.2 |
Valuation allowances | (290.3) |  |  | (290.3) |
Deferred tax assets, net of valuation allowances | 1,910.0 |  |  | 1,959.9 |
Deferred tax liabilities: |  |  |
Convertible debt | (22.7) |  |  | (53.9) |
Intangible assets | (92.4) |  |  | (158.1) |
ROU assets | (33.6) |  |  | (34.5) |
Other | (4.0) |  |  | (8.1) |
Deferred tax liabilities | (152.7) |  |  | (254.6) |
Net deferred tax asset | $ | 1,757.3 |  |  | $ | 1,705.3 |
Reported as: |  |  |
Non-current deferred tax assets | $ | 1,797.1 |  |  | $ | 1,749.2 |
Non-current deferred tax liability | (39.8) |  |  | (43.9) |
Net deferred tax asset | $ | 1,757.3 |  |  | $ | 1,705.3 |
In assessing whether it is more likely than not that deferred tax assets will be realized, the Company considers all available evidence, both positive and negative, including its recent cumulative earnings experience and expectations of future available taxable income of the appropriate character by taxing jurisdiction, tax attribute carryback and carryforward periods available for tax reporting purposes, and prudent and feasible tax planning strategies. A summary of additions and deductions related to the valuation allowance for deferred tax asset accounts for the years ended March 31, 2022, 2021 and 2020 follows (amounts in millions):
| Balance at Beginning of Year |  | Additions Charged to Costs and Expenses |  |  |  | Deductions |  | Balance at End of Year
Fiscal 2022 | $ | 290.3 |  |  | $ | 7.1 |  |  |  |  | $ | (7.1) |  |  | $ | 290.3 |
Fiscal 2021 | $ | 303.5 |  |  | $ | 8.1 |  |  |  |  | $ | (21.3) |  |  | $ | 290.3 |
Fiscal 2020 | $ | 332.1 |  |  | $ | 26.0 |  |  |  |  | $ | (54.6) |  |  | $ | 303.5 |
The Company had federal, state and foreign NOL carryforwards with an estimated tax effect of $77.0 million available at March 31, 2022. The federal, state and foreign NOL carryforwards expire at various times between fiscal 2023 and fiscal 2042, of which a portion of the NOL carryforwards do not expire. The Company had state tax credits of $164.4 million available at March 31, 2022. These state tax credits expire at various times between fiscal 2023 and fiscal 2042. The Company had capital loss carryforwards with an estimated tax effect of $9.8 million available at March 31, 2022. These capital loss carryforwards begin to expire in fiscal 2023. The Company had foreign tax credits of $0.7 million available at March 31, 2022. These foreign tax credits begin to expire in fiscal 2023. The Company had credits for increasing research activity in the amount of $79.5 million available at March 31, 2022. These credits begin to expire in fiscal 2023. The Company had U.S. prior year minimum tax credits in the amount of $0.1 million available at March 31, 2022. The Company had refundable tax credits in foreign jurisdictions of $42.0 million available at March 31, 2022. The Company had withholding tax credits in foreign jurisdictions of $19.9 million available at March 31, 2022. These credits expire at various times between fiscal 2023 and fiscal 2025. The Company intends to invest substantially all of its foreign subsidiary earnings, as well as its capital in its foreign subsidiaries, indefinitely outside of the U.S. in those jurisdictions in which the Company would incur significant, additional costs upon repatriation of such amounts. It is not practical to estimate the additional tax that would be incurred, if any, if the permanently reinvested earnings were repatriated. The enactment of the TCJA imposed a tax on all previously untaxed earnings of non-U.S. subsidiaries of U.S. corporations. Due to this change, the jurisdiction in which our cash is at any given point in time no longer has a significant impact on our liquidity. Future distributions of a significant portion of our non-U.S. assets to the U.S. will no longer be subject to U.S. federal taxation. We intend to invest substantially all of our foreign subsidiary earnings, as well as our capital in our foreign subsidiaries, indefinitely outside of the U.S. in those jurisdictions in which we would incur significant, additional costs upon repatriation of such amounts. During fiscal 2018, we recognized a one-time transition tax on accumulated unrepatriated foreign earnings, of which we expected cash payments of approximately $290.3 million. This tax is payable over a period of eight years, with 8% of the transition tax payable each year for fiscal 2019 through fiscal 2023, and 15%, 20%, and 25%, respectively, payable during fiscal 2024, fiscal 2025, and fiscal 2026. As of March 31, 2022, our transition tax payable was $197.4 million, of which $23.2 million is payable within the next 12 months. The Company recognizes interest and penalties related to unrecognized tax benefits through income tax expense. The Company is subject to income taxes in the U.S. and numerous foreign jurisdictions. The Company files U.S. federal, U.S. state, and foreign income tax returns. For U.S. federal, and in general for U.S. state tax returns, the fiscal 2007 and later tax years remain effectively open for examination by tax authorities. For foreign tax returns, the Company is generally no longer subject to income tax examinations for years prior to fiscal 2007. Significant judgment is required in evaluating the Company's uncertain tax positions and determining its provision for income taxes. Although the Company believes that it has appropriately reserved for its uncertain tax positions, no assurance can be given that the final tax outcome of these matters will not be different than expectations. The Company will adjust these reserves in light of changing facts and circumstances, such as the closing of a tax audit, the refinement of an estimate, the closing of a statutory audit period or changes in applicable tax law. To the extent that the final tax outcome of these matters is different than the amounts recorded, such differences would impact the provision for income taxes in the period in which such determination is made. The provision for income taxes includes the impact of reserve provisions and changes to the reserves that are considered appropriate, as well as related net interest. The Company recognizes liabilities for anticipated tax audit issues in the U.S. and other domestic and international tax jurisdictions based on its estimate of whether, and the extent to which, the tax positions are more likely than not to be sustained based on the technical merits. The Company believes that it has appropriate support for the income tax positions taken and to be taken on its tax returns and that its accruals for tax liabilities are adequate for all open years based on an assessment of many factors including past experience and interpretations of tax laws applied to the facts of each matter. The Company believes it maintains appropriate reserves to offset any potential income tax liabilities that may arise upon final resolution of matters for open tax years. If such reserve amounts ultimately prove to be unnecessary, the resulting reversal of such reserves could result in tax benefits being recorded in the period the reserves are no longer deemed necessary. If such amounts prove to be less than an ultimate assessment, a future charge to expense would be recorded in the period in which the assessment is determined. The following table summarizes the activity related to the Company's gross unrecognized tax benefits from April 1, 2019, to March 31, 2022 (amounts in millions):
| Fiscal Year Ended March 31,
| 2022 |  | 2021 |  | 2020
Beginning balance | $ | 826.3 |  |  | $ | 757.3 |  |  | $ | 763.4 |
Decreases related to settlements with tax authorities | (0.4) |  |  | (6.0) |  |  | (1.2) |
Decreases related to statute of limitation expirations | (12.6) |  |  | (10.9) |  |  | (30.9) |
Increases related to current year tax positions | 28.2 |  |  | 35.4 |  |  | 30.2 |
Increases (decreases) related to prior year tax positions | (37.4) |  |  | 50.5 |  |  | (4.2) |
Ending balance | $ | 804.1 |  |  | $ | 826.3 |  |  | $ | 757.3 |
As of March 31, 2022 and March 31, 2021, the Company had accrued interest and penalties related to tax contingencies of $72.7 million and $83.9 million, respectively. During the fiscal year ended March 31, 2022, the Company released previously accrued interest and penalties of $11.2 million, compared to interest and penalties charged to operations of $9.3 million during the fiscal year ended March 31, 2021, and released previously accrued interest and penalties of $13.5 million during the fiscal year ended March 31, 2020. The Company is currently under income tax examination in various tax jurisdictions in which it operates. The years under examination range from fiscal 2007 through fiscal 2020. In some jurisdictions, the Company has received tax assessments in excess of established reserves. The Company is contesting these tax assessments, and will continue to do so, including pursuing all available remedies such as appeals and litigation, if necessary. During fiscal 2022, additional assessments were received for these issues and the Company’s position remains unchanged. The total amount of gross unrecognized tax benefits was $804.1 million and $826.3 million as of March 31, 2022, and March 31, 2021, respectively, of which $692.3 million and $720.5 million is estimated to impact the Company's effective tax rate, if recognized. Unrecognized tax benefits may change in the next 12 months due to expiration of statutes of limitation, changes in the Company’s judgment about the level of uncertainty, status of tax examinations, and legislative changes. The Company estimates that it is reasonably possible unrecognized tax benefits as of March 31, 2022, could decrease by approximately $10.0 million in the next 12 months. Positions that may be resolved include various U.S. and non-U.S. matters. In July 2015, in Altera Corp. v. Commissioner, the U.S. Tax Court issued an opinion related to the treatment of stock-based compensation expense in an intercompany cost-sharing arrangement. In the July 2015 ruling, the Tax Court concluded that the sharing of the cost of employee stock compensation in a company’s cost-sharing arrangement was invalid under the U.S. Administrative Procedures Act. In June 2019, a panel of the Ninth Circuit of the U.S. Court of Appeals reversed this decision. In July 2019, Altera petitioned the U.S. Court of Appeals for the Ninth Circuit to hold an en banc rehearing of the case. In November 2019, the en banc rehearing petition was denied, and Altera has asked the Supreme Court for a judicial review. In June 2020, the U.S. Supreme Court declined to issue a writ of certiorari in Altera v Commissioner, leaving intact the decision reached by the Ninth Circuit of the U.S. Court of Appeals. Based on the Ninth Circuit Opinion, the Company recorded a cumulative income tax expense of $22.2 million as of March 31, 2022.

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- 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 http://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 http://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 http://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 http://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 http://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 http://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 http://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 http://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 http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
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