XML 119 R21.htm IDEA: XBRL DOCUMENT
v2.4.0.8

Income Taxes | 12 Months Ended
--- | ---
Mar. 29, 2014
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes Taxes on Income Domestic and foreign pretax income are as follows:
|  | Fiscal Years Ended
|  | March 29, 2014 |  | March 30, 2013 |  | March 31, 2012
|  | (millions)
Domestic |  | $ | 710 |  |  | $ | 672 |  |  | $ | 618 |
Foreign |  | 386 |  |  | 417 |  |  | 397 |
Total income before provision for income taxes |  | $ | 1,096 |  |  | $ | 1,089 |  |  | $ | 1,015 |
Provisions (benefits) for current and deferred income taxes are as follows:
|  | Fiscal Years Ended
|  | March 29, 2014 |  | March 30, 2013 |  | March 31, 2012
|  | (millions)
Current: |  |  |  |  |  |
Federal(a) |  | $ | 211 |  |  | $ | 189 |  |  | $ | 203 |
State and local(a) |  | 51 |  |  | 42 |  |  | 51 |
Foreign |  | 57 |  |  | 94 |  |  | 95 |
|  | 319 |  |  | 325 |  |  | 349 |
Deferred: |  |  |  |  |  |
Federal |  | (4 | ) |  | 9 |  |  | 4 |
State and local |  | 1 |  |  | 5 |  |  | (2 | )
Foreign |  | 4 |  |  | — |  |  | (17 | )
|  | 1 |  |  | 14 |  |  | (15 | )
Total provision for income taxes |  | $ | 320 |  |  | $ | 339 |  |  | $ | 334 |
(a) | Excludes federal, state, and local tax benefits of approximately $34 million, $41 million, and $40 million in Fiscal 2014, Fiscal 2013, and Fiscal 2012, respectively, resulting from stock-based compensation arrangements. Such amounts were recorded within equity.
Tax Rate Reconciliation The differences between income taxes expected at the U.S. federal statutory income tax rate of 35% and income taxes provided are as set forth below:
|  | Fiscal Years Ended
|  | March 29, 2014 |  | March 30, 2013 |  | March 31, 2012
|  | (millions)
Provision for income taxes at the U.S. federal statutory rate |  | $ | 384 |  |  | $ | 381 |  |  | $ | 355 |
Increase (decrease) due to: |  |  |  |  |  |
State and local income taxes, net of federal benefit |  | 29 |  |  | 28 |  |  | 28 |
Foreign income taxed at different rates, net of U.S. foreign tax credits |  | (89 | ) |  | (75 | ) |  | (56 | )
Unrecognized tax benefits and settlements of tax examinations |  | (5 | ) |  | 6 |  |  | 12 |
Other |  | 1 |  |  | (1 | ) |  | (5 | )
Total provision for income taxes |  | $ | 320 |  |  | $ | 339 |  |  | $ | 334 |
Effective tax rate(a) |  | 29.2 | % |  | 31.1 | % |  | 32.9 | %
(a) | Effective tax rate is calculated by dividing the provision for income taxes by income before provision for income taxes.
The Company's effective tax rate is lower than the statutory rate principally as a result of the proportion of earnings generated in lower taxed foreign jurisdictions versus the U.S. In addition, during Fiscal 2014, the effective tax rate was favorably impacted by tax reserve reductions associated with the conclusion of a tax examination and an income tax benefit resulting from the legal entity restructuring of certain of the Company's foreign operations during Fiscal 2014. The Company's effective tax rate for Fiscal 2013 reflected tax reserve reductions associated with a conclusion of a tax examination, offset by the inclusion of a reserve for an interest assessment on a prior year withholding tax. Deferred Taxes Significant components of the Company's net deferred tax assets (liabilities) are as follows:
|  | March 29, 2014 |  | March 30, 2013
|  | (millions)
Current deferred tax assets: |  |  |  |
Receivable allowances and reserves |  | $ | 70 |  |  | $ | 69 |
Deferred compensation |  | 31 |  |  | 21 |
Inventory basis difference |  | 30 |  |  | 19 |
Other |  | 20 |  |  | 11 |
Valuation allowance |  | (1 | ) |  | (1 | )
Net current deferred tax assets(a) |  | 150 |  |  | 119 |
Non-current deferred tax assets (liabilities): |  |  |  |
Goodwill and other intangible assets |  | (219 | ) |  | (211 | )
Property and equipment |  | (90 | ) |  | 27 |
Cumulative translation adjustment and hedges |  | (8 | ) |  | (4 | )
Lease obligations |  | 92 |  |  | — |
Deferred compensation |  | 79 |  |  | 68 |
Unrecognized tax benefits |  | 46 |  |  | 35 |
Deferred rent |  | 19 |  |  | 20 |
Deferred income |  | 18 |  |  | 33 |
Net operating loss carryforwards |  | 17 |  |  | 16 |
Transfer pricing |  | 16 |  |  | 20 |
Other |  | (1 | ) |  | — |
Valuation allowance |  | (11 | ) |  | (12 | )
Net non-current deferred tax liabilities(b) |  | (42 | ) |  | (8 | )
Net deferred tax assets |  | $ | 108 |  |  | $ | 111 |
(a) | The net current deferred tax balance as of March 30, 2013 included current deferred tax liabilities of $1 million recorded within accrued expenses and other current liabilities in the consolidated balance sheets.
(b) | The net non-current deferred tax balances as of March 29, 2014 and March 30, 2013 were comprised of non-current deferred tax assets of $39 million and $22 million, respectively, recorded within deferred tax assets, and non-current deferred tax liabilities of $81 million and $30 million, respectively, recorded within other non-current liabilities in the consolidated balance sheets.
The Company has available state and foreign net operating loss carryforwards of $4 million and $30 million, respectively, for tax purposes to offset future taxable income. The net operating loss carryforwards expire beginning in Fiscal 2015. Also, the Company has available state and foreign net operating loss carryforwards of $10 million and $51 million, respectively, for which no net deferred tax asset has been recognized. A full valuation allowance has been recorded against these carryforwards since management does not believe that the Company will more likely than not be able to utilize these carryforwards to offset future taxable income. Subsequent recognition of these deferred tax assets would result in an income tax benefit in the year of such recognition. The valuation allowance relating to state net operating loss carryforwards decreased $1 million primarily due to the Company's ability to utilize certain state net operating loss carryforwards. The valuation allowance relating to foreign net operating loss carryforwards decreased $2 million as a result of the Company's ability to utilize certain foreign net operating loss carryforwards. Provision has not been made for U.S. or additional foreign taxes on $2.176 billion of undistributed earnings of foreign subsidiaries. Those historical earnings have been and are expected to continue to be permanently reinvested. These earnings could become subject to tax if they were remitted as dividends, if foreign earnings were lent to RLC, a subsidiary or a U.S. affiliate of RLC, or if the stock of the subsidiaries were sold. Determination of the amount of unrecognized deferred tax liability with respect to such earnings is not practical. Management believes that the amount of the additional taxes that might be payable on the earnings of foreign subsidiaries, if remitted, would be partially offset by U.S. foreign tax credits. In September 2013, the Internal Revenue Service released final tangible property regulations that clarified and expanded Sections 162(a) and 263(a) of the Internal Revenue Code which relate to the deduction and capitalization of expenditures associated with tangible property as well as dispositions of tangible property. The regulations will be effective for the Company’s fiscal year ending March 28, 2015. The Company is currently evaluating the expected impact of these new regulations and believes that they will not have a material impact on the Company’s consolidated financial statements. Uncertain Income Tax Benefits Fiscal 2014, Fiscal 2013, and Fiscal 2012 Activity Reconciliations of the beginning and ending amounts of unrecognized tax benefits, excluding interest and penalties, for Fiscal 2014, Fiscal 2013, and Fiscal 2012 are presented below:
|  | Fiscal Years Ended
|  | March 29, 2014 |  | March 30, 2013 |  | March 31, 2012
|  | (millions)
Unrecognized tax benefits beginning balance |  | $ | 100 |  |  | $ | 129 |  |  | $ | 125 |
Additions related to current period tax positions |  | 6 |  |  | 4 |  |  | 4 |
Additions related to prior period tax positions |  | 12 |  |  | 12 |  |  | 8 |
Reductions related to prior period tax positions |  | (13 | ) | (a) | (32 | ) | (b) | (4 | )
Reductions related to expiration of statutes of limitations |  | (2 | ) |  | (1 | ) |  | (2 | )
Reductions related to settlements with taxing authorities |  | (23 | ) | (a) | (10 | ) | (b) | — |
Additions (reductions) related to foreign currency translation |  | 3 |  |  | (2 | ) |  | (2 | )
Unrecognized tax benefits ending balance |  | $ | 83 |  |  | $ | 100 |  |  | $ | 129 |
(a) | Includes a $29 million decline in unrecognized tax benefits as a result of the Company's tax settlement agreement reached in Fiscal 2014 for the taxable years ended April 3, 2004 and April 2, 2005.
(b) | Includes a $34 million decline in unrecognized tax benefits as a result of the Company's tax settlement agreement reached in Fiscal 2013 in connection with a tax examination for the taxable years ended March 29, 2008 through April 3, 2010.
The Company classifies interest and penalties related to unrecognized tax benefits as part of its provision for income taxes. Reconciliations of the beginning and ending amounts of accrued interest and penalties related to unrecognized tax benefits for Fiscal 2014, Fiscal 2013, and Fiscal 2012 are presented below:
|  | Fiscal Years Ended
|  | March 29, 2014 |  | March 30, 2013 |  | March 31, 2012
|  | (millions)
Accrued interest and penalties beginning balance |  | $ | 50 |  |  | $ | 39 |  |  | $ | 31 |
Net additions charged to expense |  | 6 |  |  | 22 |  | (a) | 8 |
Reductions related to prior period tax positions |  | (4 | ) |  | (10 | ) |  | — |
Reductions related to settlements with taxing authorities |  | (5 | ) |  | (1 | ) |  | — |
Additions related to foreign currency translation |  | 2 |  |  | — |  |  | — |
Accrued interest and penalties ending balance |  | $ | 49 |  |  | $ | 50 |  |  | $ | 39 |
(a) | Includes a reserve of $17 million for an interest assessment on a prior year withholding tax. No underlying tax exposure exists. The interest assessed was not material to the Company's consolidated financial statements in any period.
The total amount of unrecognized tax benefits, including interest and penalties, was $132 million and $150 million as of March 29, 2014 and March 30, 2013, respectively, and is included within the non-current liability for unrecognized tax benefits in the consolidated balance sheets. The total amount of unrecognized tax benefits that, if recognized, would affect the Company's effective tax rate was $86 million and $115 million as of March 29, 2014 and March 30, 2013, respectively. Future Changes in Unrecognized Tax Benefits The total amount of unrecognized tax benefits relating to the Company's tax positions is subject to change based on future events including, but not limited to, the settlements of ongoing tax audits and assessments and the expiration of applicable statutes of limitations. Although the outcomes and timing of such events are highly uncertain, the Company does not anticipate that the balance of gross unrecognized tax benefits, excluding interest and penalties, will change significantly during the next twelve months. However, changes in the occurrence, expected outcomes, and timing of such events could cause the Company's current estimate to change materially in the future. The Company files tax returns in the U.S. federal and various state, local, and foreign jurisdictions. With few exceptions for those tax returns, the Company is no longer subject to examinations by the relevant tax authorities for years prior to fiscal year 2006.

X
- 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/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph h -Article 4 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration