XML 37 R20.htm IDEA: XBRL DOCUMENT
v3.23.1

Income Taxes | 12 Months Ended
--- | ---
Mar. 31, 2023
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes The income tax provision (benefit) consists of the following (amounts in millions):
| Fiscal Year Ended March 31,
| 2023 |  | 2022 |  | 2021
Income (loss) before income taxes: |  |  |  |  |
U.S. | $ | 674.7 |  |  | $ | 132.2 |  |  | $ | (301.7) |
Foreign | 2,235.0 |  |  | 1,350.3 |  |  | 641.2 |
Total income before income taxes | $ | 2,909.7 |  |  | $ | 1,482.5 |  |  | $ | 339.5 |
Current provision (benefit): |  |  |  |  |
U.S. Federal | $ | 389.5 |  |  | $ | 191.6 |  |  | $ | 54.8 |
State | 5.0 |  |  | 3.7 |  |  | 2.0 |
Foreign | 72.0 |  |  | (6.2) |  |  | 72.2 |
Total current provision | $ | 466.5 |  |  | $ | 189.1 |  |  | $ | 129.0 |
Deferred provision (benefit): |  |  |  |  |
U.S. Federal | $ | 53.7 |  |  | $ | (78.7) |  |  | $ | (215.4) |
State | 4.6 |  |  | (9.1) |  |  | (22.9) |
Foreign | 147.2 |  |  | 95.7 |  |  | 99.4 |
Total deferred provision (benefit) | 205.5 |  |  | 7.9 |  |  | (138.9) |
Income tax provision (benefit) | $ | 672.0 |  |  | $ | 197.0 |  |  | $ | (9.9) |
The provision (benefit) 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 (benefit) are as follows (amounts in millions):
| Fiscal Year Ended March 31,
| 2023 |  | 2022 |  | 2021
Computed expected income tax provision | $ | 611.0 |  |  | $ | 311.3 |  |  | $ | 71.3 |
State income taxes, net of federal benefit | 8.6 |  |  | 3.5 |  |  | (3.8) |
Effects of foreign operations - rate differential | (184.0) |  |  | (96.8) |  |  | (37.7) |
Effects of foreign operations - other, net of foreign tax credits | 258.9 |  |  | 139.9 |  |  | 122.5 |
Foreign-derived intangible income ("FDII") | — |  |  | (27.3) |  |  | (10.5) |
Business realignment of intellectual property rights | — |  |  | (3.1) |  |  | (63.8) |
Change in uncertain tax positions | 50.6 |  |  | (47.1) |  |  | 28.1 |
Share-based compensation | (11.4) |  |  | (17.6) |  |  | (12.3) |
R&D tax credits | (63.8) |  |  | (49.5) |  |  | (47.6) |
Income tax holidays | (26.7) |  |  | (22.5) |  |  | (11.1) |
Convertible debt settlement | 0.7 |  |  | (25.5) |  |  | (48.1) |
Other | 19.0 |  |  | 31.7 |  |  | 16.4 |
Change in valuation allowance | 9.1 |  |  | — |  |  | (13.3) |
Income tax provision (benefit) | $ | 672.0 |  |  | $ | 197.0 |  |  | $ | (9.9) |
The foreign tax rate differential benefit primarily relates to the Company's operations in Malta 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 2024 and 2031, 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 $26.7 million, $22.5 million, and $11.1 million in fiscal 2023, fiscal 2022, and fiscal 2021, respectively. The impact of the tax holidays increased each of the basic and diluted net income per common share by $0.05 in fiscal 2023, $0.04 in fiscal 2022, and $0.02 in fiscal 2021. 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,
| 2023 |  | 2022
Deferred tax assets: |  |  |
Accrued expenses | $ | 64.7 |  |  | $ | 81.6 |
Capital loss carryforward | 11.0 |  |  | 9.8 |
Deferred revenue | — |  |  | 90.4 |
Income tax credits | 312.7 |  |  | 306.6 |
Intangible assets | 1,328.7 |  |  | 1,479.9 |
Inventory valuation | 40.0 |  |  | 26.8 |
Lease liabilities | 35.8 |  |  | 36.1 |
Net operating loss carryforward | 73.9 |  |  | 77.0 |
Property, plant and equipment | 7.0 |  |  | 40.8 |
Share-based compensation | 37.7 |  |  | 45.8 |
Other | 4.0 |  |  | 5.5 |
Gross deferred tax assets | 1,915.5 |  |  | 2,200.3 |
Valuation allowances | (299.4) |  |  | (290.3) |
Deferred tax assets, net of valuation allowances | 1,616.1 |  |  | 1,910.0 |
Deferred tax liabilities: |  |  |
Convertible debt | — |  |  | (22.7) |
Intangible assets | (1.6) |  |  | (92.4) |
ROU assets | (33.9) |  |  | (33.6) |
Other | — |  |  | (4.0) |
Deferred tax liabilities | (35.5) |  |  | (152.7) |
Net deferred tax asset | $ | 1,580.6 |  |  | $ | 1,757.3 |
Reported as: |  |  |
Non-current deferred tax assets | $ | 1,623.3 |  |  | $ | 1,797.1 |
Non-current deferred tax liability | (42.7) |  |  | (39.8) |
Net deferred tax asset | $ | 1,580.6 |  |  | $ | 1,757.3 |
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. Additions and deductions related to the valuation allowance for deferred tax assets for the three fiscal years ended March 31, 2023 were as follows (amounts in millions):
| Balance at Beginning of Year |  | Additions Charged to Costs and Expenses |  |  |  | Deductions |  | Balance at End of Year
Fiscal 2023 | $ | 290.3 |  |  | $ | 19.3 |  |  |  |  | $ | (10.2) |  |  | $ | 299.4 |
Fiscal 2022 | $ | 290.3 |  |  | $ | 7.1 |  |  |  |  | $ | (7.1) |  |  | $ | 290.3 |
Fiscal 2021 | $ | 303.5 |  |  | $ | 8.1 |  |  |  |  | $ | (21.3) |  |  | $ | 290.3 |
The Company had federal, state and foreign NOL carryforwards with an estimated tax effect of $73.9 million available at March 31, 2023, which expire at various times between fiscal 2024 and fiscal 2043, of which a portion of the NOL carryforwards do not expire. The Company had capital loss carryforwards with an estimated tax effect of $11.0 million available at March 31, 2023, which begin to expire in fiscal 2024. The Company had federal, state and foreign credits of $251.5 million available at March 31, 2023, which begin to expire in fiscal 2024. The Company had refundable tax credits in foreign jurisdictions of $39.5 million available at March 31, 2023. The Company had withholding tax credits in foreign jurisdictions of $21.7 million available at March 31, 2023. These credits expire at various times between fiscal 2024 and fiscal 2026. 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 the Company's cash is at any given point in time no longer has a significant impact on the Company's liquidity. Distributions of the Company's future earnings will no longer be subject to U.S. federal taxation. The Company intends to invest substantially all of the Company's foreign subsidiary earnings, as well as the Company's capital in the Company's 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. During fiscal 2018, the Company recognized a one-time transition tax on accumulated unrepatriated foreign earnings, of which the Company 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, 2023, the Company's transition tax payable was $174.2 million, of which $43.5 million is payable within the next 12 months and is included within accrued liabilities and the remaining $130.7 million is included within long-term income tax payable on the Company's consolidated balance sheets. 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 for the three fiscal years ended March 31, 2023 (amounts in millions):
| Fiscal Year Ended March 31,
| 2023 |  | 2022 |  | 2021
Beginning gross unrecognized tax benefit | $ | 804.1 |  |  | $ | 826.3 |  |  | $ | 757.3 |
Decreases related to settlements with tax authorities | (0.4) |  |  | (0.4) |  |  | (6.0) |
Decreases related to statute of limitation expirations | (11.7) |  |  | (12.6) |  |  | (10.9) |
Increases related to current year tax positions | 65.9 |  |  | 28.2 |  |  | 35.4 |
Increases (decreases) related to prior year tax positions | (9.9) |  |  | (37.4) |  |  | 50.5 |
Ending gross unrecognized tax benefits | $ | 848.0 |  |  | $ | 804.1 |  |  | $ | 826.3 |
As of March 31, 2023 and March 31, 2022, the Company had accrued interest and penalties related to tax contingencies of $80.4 million and $72.7 million, respectively, included within long-term income tax payable on the consolidated balance sheets. During the fiscal year ended March 31, 2023, and the fiscal year ended March 31, 2021, interest and penalties charged to operations were $7.6 million and $9.3 million, respectively, compared to the release of previously accrued interest and penalties of $11.2 million during the fiscal year ended March 31, 2022. 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 2022. 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 2023, additional assessments were received for these issues and the Company’s position remains unchanged. The total amount of gross unrecognized tax benefits was $848.0 million and $804.1 million as of March 31, 2023, and March 31, 2022, respectively, of which $729.3 million and $692.3 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, 2023, 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 September 2021, the Company received a Notice from the IRS for fiscal 2007 through fiscal 2012. The disputed amounts largely relate to transfer pricing matters. In December 2021, the Company filed a petition in the United States Tax Court challenging the Notice. In May 2023, the Company received a proposed income adjustment from the Malaysian IRB for fiscal 2020, which if upheld by the highest court that has jurisdiction over this matter in Malaysia, could result in income taxes up to $420.0 million, exclusive of interest and penalties. The disputed amounts largely relate to the characterization of certain assets. Depending on the outcome of the IRB audit, the Company may need to take the matter to court in Malaysia, and if it does, it may be required to pay the assessment and then request a refund from the court upon a series of favorable rulings. The timing of adjudicating this matter is uncertain but could commence in the next 12 months. The Company firmly believes that the assessments described above are without merit and plans to pursue all available administrative and judicial remedies necessary to resolve these matters. The Company intends to vigorously defend its positions and it is confident in its ability to prevail on the merits. The Company regularly assesses the likelihood of adverse outcomes resulting from examinations such as these to determine the adequacy of its tax reserves. The Company believes that the final adjudication of these matters will not have a material impact on its consolidated financial position and results of operations or cash flows. However, the ultimate outcome of disputes of this nature is uncertain, and if the IRS and IRB were to prevail on their assertions, the assessed tax, penalties, and deficiency interest could have a material adverse impact on the Company's financial position, results of operations or cash flows.

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