XML 34 R19.htm IDEA: XBRL DOCUMENT
v3.7.0.1

Income Taxes | 12 Months Ended
--- | ---
Apr. 01, 2017
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes Taxes on Income (Loss) Domestic and foreign pretax income (loss) are as follows:
|  | Fiscal Years Ended
|  | April 1, 2017 |  | April 2, 2016 |  | March 28, 2015
|  | (millions)
Domestic |  | $ | (155.3 | ) |  | $ | 274.8 |  |  | $ | 620.5 |
Foreign |  | 50.4 |  |  | 277.0 |  |  | 366.9 |
Total income (loss) before income taxes |  | $ | (104.9 | ) |  | $ | 551.8 |  |  | $ | 987.4 |
Benefits (provisions) for current and deferred income taxes are as follows:
|  | Fiscal Years Ended
|  | April 1, 2017 |  | April 2, 2016 |  | March 28, 2015
|  | (millions)
Current: |  |  |  |  |  |
Federal(a) |  | $ | 29.1 |  |  | $ | (87.9 | ) |  | $ | (161.2 | )
State and local(a) |  | 2.3 |  |  | 3.2 |  |  | (35.1 | )
Foreign |  | (64.7 | ) |  | (78.6 | ) |  | (78.4 | )
|  | (33.3 | ) |  | (163.3 | ) |  | (274.7 | )
Deferred: |  |  |  |  |  |
Federal |  | 25.1 |  |  | 4.6 |  |  | (21.5 | )
State and local |  | 2.9 |  |  | 1.4 |  |  | (2.6 | )
Foreign |  | 10.9 |  |  | 1.9 |  |  | 13.6 |
|  | 38.9 |  |  | 7.9 |  |  | (10.5 | )
Total income tax benefit (provision) |  | $ | 5.6 |  |  | $ | (155.4 | ) |  | $ | (285.2 | )
(a) | Excludes federal, state, and local tax provisions of $17.3 million in Fiscal 2017 and federal, state, and local tax benefits of $10.2 million and $7.7 million in Fiscal 2016 and Fiscal 2015, 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
|  | April 1, 2017 |  | April 2, 2016 |  | March 28, 2015
|  | (millions)
Benefit (provision) for income taxes at the U.S. federal statutory rate |  | $ | 36.7 |  |  | $ | (193.2 | ) |  | $ | (345.6 | )
Change due to: |  |  |  |  |  |
State and local income taxes, net of federal benefit |  | 2.7 |  |  | (10.9 | ) |  | (20.9 | )
Foreign income taxed at different rates, net of U.S. foreign tax credits |  | (25.4 | ) |  | 33.6 |  |  | 96.1 |
Unrecognized tax benefits and settlements of tax examinations |  | 0.5 |  |  | 12.7 |  |  | (11.5 | )
Changes in valuation allowance on deferred tax assets |  | (7.3 | ) |  | — |  |  | — |
Other |  | (1.6 | ) |  | 2.4 |  |  | (3.3 | )
Total income tax benefit (provision) |  | $ | 5.6 |  |  | $ | (155.4 | ) |  | $ | (285.2 | )
Effective tax rate(a) |  | 5.3 | % |  | 28.2 | % |  | 28.9 | %
(a) | Effective tax rate is calculated by dividing the income tax benefit (provision) by income (loss) before income taxes.
The Company's Fiscal 2017 effective tax rate is lower than the statutory rate primarily due to the tax impact of earnings in foreign jurisdictions, valuation allowances and adjustments recorded on deferred tax assets, income tax reserves largely associated with an income tax settlement and certain income tax audits, partially offset by the reversal of an income tax reserve resulting from a change in tax law that impacted an interest assessment on a prior year withholding tax. The Company's Fiscal 2016 and Fiscal 2015 effective tax rates were lower than the statutory tax rate primarily due to the tax impact of earnings in foreign jurisdictions. The Fiscal 2016 effective tax rate was also favorably impacted by a change to the assessment period associated with certain tax liabilities, partially offset by the reversal of certain deferred tax assets that were determined to not be realizable. In addition, the Company's effective tax rate during Fiscal 2015 was favorably impacted by income tax benefits resulting from the legal entity restructuring of certain of the Company's foreign operations. During the second quarter of Fiscal 2016, the Company concluded, with the assistance of a third-party consultant, that based on recent audit settlements and taxpayer audit trends, the assessment period associated with certain tax liabilities established under ASC Topic 740, "Income Taxes," should be reduced. This change is considered a change in estimate for accounting purposes and the related impact was recorded during the second quarter of Fiscal 2016. This change lowered the Company's provision for income taxes by $7.7 million, including interest and penalties, and net of deferred tax asset reversals, and increased basic and diluted earnings per share by $0.09 for Fiscal 2016. Deferred Taxes Significant components of the Company's net deferred tax assets (liabilities) are as follows:
|  | April 1, 2017 |  | April 2, 2016
|  | (millions)
Goodwill and other intangible assets |  | $ | (217.1 | ) |  | $ | (217.0 | )
Property and equipment |  | (61.6 | ) |  | (89.4 | )
Cumulative translation adjustment and hedges |  | (10.8 | ) |  | 7.6 |
Deferred compensation |  | 141.6 |  |  | 126.2 |
Lease obligations |  | 80.7 |  |  | 87.9 |
Receivable allowances and reserves |  | 65.8 |  |  | 66.1 |
Net operating loss carryforwards |  | 64.1 |  |  | 21.4 |
Inventory basis difference |  | 21.8 |  |  | 29.5 |
Unrecognized tax benefits |  | 16.0 |  |  | 20.9 |
Deferred rent |  | 14.3 |  |  | 17.4 |
Accrued expenses |  | 9.8 |  |  | 8.8 |
Deferred income |  | 9.0 |  |  | 15.2 |
Excess foreign tax credits |  | 7.9 |  |  | — |
Transfer pricing |  | 5.6 |  |  | 5.9 |
Other |  | 5.1 |  |  | 11.9 |
Valuation allowance |  | (38.1 | ) |  | (10.0 | )
Net deferred tax assets (liabilities)(a) |  | $ | 114.1 |  |  | $ | 102.4 |
(a) | The net deferred tax balances as of April 1, 2017 and April 2, 2016 were comprised of non-current deferred tax assets of $125.9 million and $118.7 million, respectively, recorded within deferred tax assets, and non-current deferred tax liabilities of $11.8 million and $16.3 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 $3.4 million and $156.6 million, respectively, for tax purposes to offset future taxable income. The net operating loss carryforwards expire beginning in Fiscal 2018. The Company also has available state and foreign net operating loss carryforwards of $38.9 million and $202.3 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 remained consistent with the prior year. The valuation allowance relating to foreign net operating loss carryforwards increased by $185.7 million mainly as a result of additional net operating losses in certain jurisdictions where management does not believe that the Company will more likely than not be able to utilize these carryforwards in the future. Provision has not been made for U.S. or additional foreign taxes on $2.298 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 practicable. 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. Uncertain Income Tax Benefits Fiscal 2017, Fiscal 2016, and Fiscal 2015 Activity Reconciliations of the beginning and ending amounts of unrecognized tax benefits, excluding interest and penalties, for Fiscal 2017, Fiscal 2016, and Fiscal 2015 are presented below:
|  | Fiscal Years Ended |
|  | April 1, 2017 |  | April 2, 2016 |  | March 28, 2015 |
|  | (millions) |
Unrecognized tax benefits beginning balance |  | $ | 49.7 |  |  | $ | 68.0 |  |  | $ | 82.6 |  |
Additions related to current period tax positions |  | 5.3 |  |  | 5.0 |  |  | 4.7 |  |
Additions related to prior period tax positions |  | 15.3 |  |  | 6.9 |  |  | 10.0 |  |
Reductions related to prior period tax positions |  | (3.4 | ) |  | (11.3 | ) |  | (1.1 | ) |
Reductions related to expiration of statutes of limitations |  | (4.1 | ) |  | (7.2 | ) |  | (0.7 | ) |
Reductions related to settlements with taxing authorities |  | (12.0 | ) |  | (12.0 | ) |  | (25.0 | ) | (a)
Additions (reductions) related to foreign currency translation |  | (0.9 | ) |  | 0.3 |  |  | (2.5 | ) |
Unrecognized tax benefits ending balance |  | $ | 49.9 |  |  | $ | 49.7 |  |  | $ | 68.0 |  |
(a) | Includes a $20.0 million decline in unrecognized tax benefits as a result of the Company's tax settlement agreement reached in Fiscal 2015 for the taxable years ended April 2, 2011 and April 3, 2012.
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 2017, Fiscal 2016, and Fiscal 2015 are presented below:
|  | Fiscal Years Ended
|  | April 1, 2017 |  | April 2, 2016 |  | March 28, 2015
|  | (millions)
Accrued interest and penalties beginning balance |  | $ | 30.9 |  |  | $ | 47.6 |  |  | $ | 49.7 |
Net additions charged to expense |  | 2.3 |  |  | 4.0 |  |  | 6.3 |
Reductions related to prior period tax positions |  | (18.3 | ) | (a) | (15.4 | ) |  | (1.3 | )
Reductions related to settlements with taxing authorities |  | (0.8 | ) |  | (5.3 | ) |  | (5.3 | )
Additions (reductions) related to foreign currency translation |  | (1.3 | ) |  | — |  |  | (1.8 | )
Accrued interest and penalties ending balance |  | $ | 12.8 |  |  | $ | 30.9 |  |  | $ | 47.6 |
(a) | Includes a $15.9 million reversal of an income tax reserve resulting from a change in tax law that impacted an interest assessment on a prior year withholding tax.
The total amount of unrecognized tax benefits, including interest and penalties, was $62.7 million and $80.6 million as of April 1, 2017 and April 2, 2016, 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 $46.7 million and $59.6 million as of April 1, 2017 and April 2, 2016, 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, 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 a consolidated U.S. federal income tax return, as well as tax returns in various state, local, and foreign jurisdictions. The Company is generally no longer subject to examinations by the relevant tax authorities for years prior to its fiscal year ended April 1, 2006.

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/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 2: 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 Reference 3: 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 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 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration