XML 35 R19.htm IDEA: XBRL DOCUMENT
v3.22.1

Income Taxes | 12 Months Ended
--- | ---
Apr. 02, 2022
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes Swiss Tax Reform In May 2019, a public referendum was held in Switzerland that approved the Federal Act on Tax Reform and AHV Financing (the "Swiss Tax Act"), which became effective January 1, 2020. The Swiss Tax Act eliminates certain preferential tax items at both the federal and cantonal levels for multinational companies, and provides the cantons with parameters for establishing local tax rates and regulations. The Swiss Tax Act also provides transitional provisions, one of which allows eligible companies to increase the tax basis of certain assets based on the value generated by their business in previous years, and to amortize such adjustment as a tax deduction over a transitional period. During the second quarter of Fiscal 2020, the Swiss Tax Act was enacted into law, resulting in an immaterial adjustment associated with the revaluation of the Company's Swiss deferred tax assets and liabilities and the then estimated annual effective tax rate. Subsequently, as a result of additional information received from tax authorities and analyses performed related to the transitional provision noted above, the Company recorded a one-time income tax benefit and corresponding deferred tax asset of $122.9 million during Fiscal 2020, which reduced the Company's effective tax rate by 3,760 basis points. During Fiscal 2021, the Company reduced its one-time tax benefit by $13.8 million due to new legislation enacted in connection with the European Union's anti-tax avoidance directive, which increased the Company's effective tax rate by 1,840 basis points. Additionally, during Fiscal 2022, the Company recorded a charge of $6.4 million within restructuring and other charges, net in the consolidated statements of operations in connection with non-income-related capital taxes resulting from Swiss Tax Reform. Taxes on Income Domestic and foreign pretax income (loss) are as follows:
|  | Fiscal Years Ended
|  | April 2, 2022 |  | March 27, 2021 |  | March 28, 2020
|  | (millions)
Domestic |  | $ | 180.7 |  |  | $ | (285.0) |  |  | $ | (82.9) |
Foreign |  | 573.9 |  |  | 210.2 |  |  | 409.3 |
Total income (loss) before income taxes |  | $ | 754.6 |  |  | $ | (74.8) |  |  | $ | 326.4 |
Benefits (provisions) for current and deferred income taxes are as follows:
|  | Fiscal Years Ended
|  | April 2, 2022 |  | March 27, 2021 |  | March 28, 2020
|  | (millions)
Current: |  |  |  |  |  |
Federal |  | $ | (24.2) |  |  | $ | 38.5 |  |  | $ | 1.5 |
State and local |  | (21.6) |  |  | 1.5 |  |  | (19.8) |
Foreign |  | (154.8) |  |  | (50.7) |  |  | (92.6) |
|  | (200.6) |  |  | (10.7) |  |  | (110.9) |
Deferred: |  |  |  |  |  |
Federal |  | 53.8 |  |  | (19.2) |  |  | 18.0 |
State and local |  | 8.2 |  |  | 3.5 |  |  | 5.6 |
Foreign |  | (15.9) |  |  | (19.9) |  |  | 145.2 |
|  | 46.1 |  |  | (35.6) |  |  | 168.8 |
Total income tax benefit (provision) |  | $ | (154.5) |  |  | $ | (46.3) |  |  | $ | 57.9 |
Tax Rate Reconciliation The differences between income taxes expected at the U.S. federal statutory income tax rate and income taxes provided are as follows:
|  | Fiscal Years Ended
|  | April 2, 2022 |  | March 27, 2021 |  | March 28, 2020
|  | (millions)
Benefit (provision) for income taxes at the U.S. federal statutory rate |  | $ | (158.5) |  |  | $ | 15.7 |  |  | $ | (68.5) |
Change due to: |  |  |  |  |  |
State and local income taxes, net of federal benefit |  | (14.5) |  |  | 6.1 |  |  | (1.5) |
Foreign income taxed at different rates, net of U.S. foreign tax credits |  | (2.6) |  |  | (4.8) |  |  | 24.7 |
Deferred tax adjustments |  | 8.0 |  |  | — |  |  | — |
Foreign-derived intangible income benefit |  | 20.3 |  |  | — |  |  | — |
Changes in valuation allowance on deferred tax assets |  | 3.6 |  |  | (34.9) |  |  | (1.7) |
Unrecognized tax benefits and settlements of tax examinations |  | (11.5) |  |  | (4.6) |  |  | (9.2) |
Swiss Tax Act benefit (expense) |  | — |  |  | (13.8) |  |  | 125.3 |
Compensation-related adjustments |  | (9.4) |  |  | (12.9) |  |  | (10.7) |
Charitable contributions |  | 3.7 |  |  | 7.4 |  |  | 0.2 |
Transfer pricing adjustments |  | — |  |  | (4.1) |  |  | — |
Other |  | 6.4 |  |  | (0.4) |  |  | (0.7) |
Total income tax benefit (provision) |  | $ | (154.5) |  |  | $ | (46.3) |  |  | $ | 57.9 |
Effective tax rate(a) |  | 20.5 | % |  | (61.9 | %) |  | (17.7 | %)
(a)Effective tax rate is calculated by dividing the income tax benefit (provision) by income (loss) before income taxes. The Company's Fiscal 2022 effective tax rate was slightly lower than the U.S. federal statutory income tax rate of 21% primarily due to favorable tax impacts of the foreign-derived intangible income deduction and deferred tax adjustments, partially offset by the unfavorable impacts of additional income tax reserves associated with certain income tax audits and tax impacts of compensation related adjustments. The Company's Fiscal 2021 effective tax rate was unfavorable to the U.S. federal statutory income tax rate of 21% primarily due to incremental tax expense resulting from new legislation enacted in connection with the European Union's anti-tax avoidance directive, valuation allowances recorded against certain deferred tax assets as a result of significant business disruptions attributable to COVID-19, and tax impacts on stock-based compensation and other permanent adjustments, partially offset by an income tax benefit related to charitable contributions. The Company's Fiscal 2020 effective tax rate was lower than the U.S. federal statutory income tax rate of 21% primarily due to the one-time income tax benefit recorded in connection with the Swiss Tax Act, as previously discussed, the favorable impact of the change in geographic mix of its worldwide earnings and the favorable impact of tax benefits associated with provision to tax return adjustments, partially offset by the unfavorable impact of additional income tax reserves associated with certain income tax audits. Deferred Taxes Significant components of the Company's deferred tax assets and liabilities are as follows:
|  | April 2, 2022 |  | March 27, 2021
|  | (millions)
Lease liabilities |  | $ | 349.5 |  |  | $ | 406.6 |
Deferred income |  | 96.0 |  |  | 1.2 |
Net operating loss carryforwards |  | 58.9 |  |  | 59.6 |
Deferred compensation |  | 34.5 |  |  | 49.7 |
Unrecognized tax benefits |  | 31.7 |  |  | 23.3 |
Receivable allowances and reserves |  | 31.2 |  |  | 30.5 |
Inventory basis difference |  | 27.5 |  |  | 44.9 |
Property and equipment |  | 15.7 |  |  | 22.8 |
GILTI-related carryforwards |  | 10.6 |  |  | 34.1 |
Accrued expenses |  | 7.3 |  |  | 13.0 |
Transfer pricing |  | 4.1 |  |  | 4.1 |
Charitable contribution carryforwards |  | 0.4 |  |  | 18.4 |
Lease right-of-use assets |  | (273.1) |  |  | (322.0) |
Goodwill and other intangible assets |  | (53.9) |  |  | (48.2) |
Cumulative translation adjustment and hedges |  | (11.3) |  |  | 4.0 |
Other |  | 7.3 |  |  | 3.2 |
Valuation allowance |  | (45.1) |  |  | (72.0) |
Net deferred tax assets(a) |  | $ | 291.3 |  |  | $ | 273.2 |
(a)Net deferred tax balances as of April 2, 2022 and March 27, 2021 were comprised of non-current deferred tax assets of $303.8 million and $283.9 million, respectively, recorded within deferred tax assets, and non-current deferred tax liabilities of $12.5 million and $10.7 million, respectively, recorded within other non-current liabilities in the consolidated balance sheets. The Company has available federal, state, and foreign net operating loss carryforwards of $16.9 million, $5.8 million, and $3.8 million (all net of tax), respectively, for tax purposes to offset future taxable income. The net operating loss carryforwards expire beginning in Fiscal 2023. The Company also has available state and foreign net operating loss carryforwards of $4.7 million and $27.6 million (both net of tax), respectively, for which no net deferred tax asset has been recognized. A full valuation allowance has been recorded against these carryforwards since the Company does not believe that it 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 by $3.8 million (net of tax) as a result of changes in jurisdictions where the Company does not believe that it will more likely than not be able to utilize these carryforwards in the future. The valuation allowance relating to foreign net operating loss carryforwards increased by $0.2 million, mainly due to differences in foreign exchange rates. In January 2018, new U.S. tax legislation commonly referred to as the Tax Cuts and Jobs Act (the "TCJA") became effective. The TCJA significantly revised U.S. tax law by, among other provisions, creating a territorial tax system that included a one-time mandatory transition tax on previously deferred foreign earnings. As a result of the taxation of undistributed foreign earnings in connection with the TCJA, the Company reevaluated its permanent reinvestment assertion and determined that undistributed foreign earnings that were subject to the TCJA's one-time mandatory transition tax were no longer considered to be permanently reinvested, effective December 31, 2017. The mandatory transition tax does not apply to undistributed foreign earnings generated after December 31, 2017. Accordingly, provision has not been made for U.S. or additional foreign taxes on approximately $1.884 billion of undistributed earnings of foreign subsidiaries generated after December 31, 2017, as such earnings are expected 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. Uncertain Income Tax Benefits Fiscal 2022, Fiscal 2021, and Fiscal 2020 Activity Reconciliations of the beginning and ending amounts of unrecognized tax benefits, excluding interest and penalties, for Fiscal 2022, Fiscal 2021, and Fiscal 2020 are presented below:
|  | Fiscal Years Ended
|  | April 2, 2022 |  | March 27, 2021 |  | March 28, 2020
|  | (millions)
Unrecognized tax benefits beginning balance |  | $ | 71.4 |  |  | $ | 72.7 |  |  | $ | 65.2 |
Additions related to current period tax positions |  | 21.6 |  |  | 3.2 |  |  | 6.0 |
Additions related to prior period tax positions |  | 8.1 |  |  | 8.8 |  |  | 30.5 |
Reductions related to prior period tax positions |  | (7.6) |  |  | (4.2) |  |  | (18.7) |
Reductions related to expiration of statutes of limitations |  | (1.1) |  |  | (2.1) |  |  | (1.2) |
Reductions related to settlements with taxing authorities |  | (14.8) |  |  | (9.6) |  |  | (8.8) |
Additions (reductions) related to foreign currency translation |  | (2.2) |  |  | 2.6 |  |  | (0.3) |
Unrecognized tax benefits ending balance |  | $ | 75.4 |  |  | $ | 71.4 |  |  | $ | 72.7 |
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 2022, Fiscal 2021, and Fiscal 2020 are presented below:
|  | Fiscal Years Ended
|  | April 2, 2022 |  | March 27, 2021 |  | March 28, 2020
|  | (millions)
Accrued interest and penalties beginning balance |  | $ | 20.0 |  |  | $ | 16.2 |  |  | $ | 13.6 |
Net additions charged to expense |  | 2.6 |  |  | 5.5 |  |  | 7.0 |
Reductions related to prior period tax positions |  | (0.9) |  |  | (1.7) |  |  | (1.9) |
Reductions related to settlements with taxing authorities |  | (5.0) |  |  | (0.3) |  |  | (2.5) |
Additions (reductions) related to foreign currency translation |  | (0.2) |  |  | 0.3 |  |  | — |
Accrued interest and penalties ending balance |  | $ | 16.5 |  |  | $ | 20.0 |  |  | $ | 16.2 |
The total amount of unrecognized tax benefits, including interest and penalties, was $91.9 million and $91.4 million as of April 2, 2022 and March 27, 2021, respectively, and was 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 $60.1 million and $68.0 million as of April 2, 2022 and March 27, 2021, 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 March 30, 2013.

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 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
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration