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Income Taxes | 12 Months Ended
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Mar. 31, 2024
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes The components of income tax expense were as follows:
|  | Fiscal Year Ended March 31,
|  | 2024 |  | 2023 |  | 2022
Current |  |  |  |  |  |
U.S. Federal |  | $ | 229,234 |  |  | $ | 354,569 |  |  | $ | 232,844 |
State and local |  | 116,751 |  |  | 86,947 |  |  | 26,333 |
Foreign |  | 2,635 |  |  | 9,120 |  |  | 8,486 |
Total current |  | 348,620 |  |  | 450,636 |  |  | 267,663 |
Deferred |  |  |  |  |  |
U.S. Federal |  | (94,321) |  |  | (300,494) |  |  | (146,581) |
State and local |  | (5,990) |  |  | (50,318) |  |  | 11,781 |
Foreign |  | (695) |  |  | (3,090) |  |  | 4,603 |
Total deferred |  | (101,006) |  |  | (353,902) |  |  | (130,197) |
Total |  | $ | 247,614 |  |  | $ | 96,734 |  |  | $ | 137,466 |
A reconciliation of the provision for income tax to the amount computed by applying the statutory federal income tax rate to income from continuing operations before income taxes for each of the three years ended March 31 is as follows:
|  | Fiscal Year Ended March 31,
|  | 2024 |  | 2023 |  | 2022
Income tax expense computed at U.S. federal statutory rate |  | $ | 179,197 |  |  | $ | 77,269 |  |  | $ | 126,981 |
Increases (reductions) resulting from: |  |  |  |  |  |
State and local income taxes, net of federal tax |  | 85,486 |  |  | 32,599 |  |  | 28,762 |
Foreign income taxes, net of federal tax |  | (7,932) |  |  | 4,765 |  |  | 9,243 |
Non-deductible expenses, including non-deductible penalties |  | 4,867 |  |  | 34,825 |  |  | 859 |
Excess tax benefits from stock-based compensation |  | (10,091) |  |  | (5,247) |  |  | (4,227) |
Research and development and other federal credits |  | (31,289) |  |  | (33,159) |  |  | (34,080) |
Executive compensation -162(m) |  | 6,307 |  |  | 4,295 |  |  | 3,614 |
Foreign-Derived Intangible Income (FDII) |  | (13,971) |  |  | (15,869) |  |  | (9,115) |
Changes in uncertain tax positions (including indirect effects) |  | 37,592 |  |  | (6,498) |  |  | 16,938 |
Other |  | (2,552) |  |  | 3,754 |  |  | (1,509) |
Income tax expense from operations |  | $ | 247,614 |  |  | $ | 96,734 |  |  | $ | 137,466 |
Tax Receivables and Payables The Company has both income tax receivables and income tax payable on its consolidated balance sheet as follows:
|  | March 31,
|  | 2024 |  | 2023
Current income tax receivable |  | $ | 47,158 |  |  | $ | 23,633 |
Long term income tax receivable |  | $ | 152,474 |  |  | $ | 167,821 |
Current income tax payable |  | $ | 11,331 |  |  | $ | 14,523 |
Current income tax receivable represents previously made estimated payments that will be applied to the Company’s future U.S. federal and state tax returns. This amount is classified as prepaid expenses and other current assets on the consolidated balance sheet. Current income tax payable represents current liabilities associated with the Company’s current tax returns that the Company intends to file in fiscal 2025. This amount is classified as other current liabilities on the consolidated balance sheet. The long-term income tax receivable represents the amended U.S. federal return refund claims for research and development tax credits and the carryback claim for the fiscal 2021 net operating loss which is classified as other long-term assets on the consolidated balance sheet. The Company is currently under federal audit by the IRS for fiscal years 2016, 2017 and 2019-2021 and the receipt of our U.S federal return refund claims is contingent upon the completion of the ongoing IRS audits. Deferred Taxes The significant components of the Company’s deferred income tax assets and liabilities were as follows:
|  | March 31,
|  | 2024 |  | 2023
Deferred income tax assets: |  |  |  |
Accrued expenses |  | $ | 102,618 |  |  | $ | 146,945 |
Deferred compensation |  | 54,314 |  |  | 47,931 |
Stock-based compensation |  | 11,107 |  |  | 11,628 |
Pension and postretirement benefits |  | 34,895 |  |  | 28,585 |
Net operating loss and other carryforwards |  | 9,621 |  |  | 16,984 |
Research and development expenditures and indirect effects |  | 248,147 |  |  | 599,381 |
State tax credits |  | 108 |  |  | 11,516 |
Operating lease liabilities |  | 63,781 |  |  | 69,604 |
Other |  | 10,261 |  |  | 9,100 |
Total gross deferred income tax assets |  | 534,852 |  |  | 941,674 |
Less: Valuation allowance |  | (8,078) |  |  | (11,788) |
Total net deferred income tax assets |  | 526,774 |  |  | 929,886 |
Deferred income tax liabilities: |  |  |  |
Unbilled receivables |  | (131,919) |  |  | (177,321) |
Intangible assets |  | (93,207) |  |  | (88,858) |
Property and equipment |  | (25,725) |  |  | (34,905) |
Operating lease right-of-use assets |  | (45,022) |  |  | (48,939) |
Other |  | (3,730) |  |  | (6,083) |
Total deferred income tax liabilities |  | (299,603) |  |  | (356,106) |
Net deferred income tax asset |  | $ | 227,171 |  |  | $ | 573,780 |
Deferred tax balances arise from temporary differences between the carrying amount of assets and liabilities and their tax basis and are stated at the enacted tax rates in effect for the year in which the differences are expected to reverse. A valuation allowance is provided against deferred tax assets when it is more likely than not that some or all of the deferred tax asset will not be realized. In determining if the Company's deferred tax assets are realizable, management considers all positive and negative evidence, including the history of generating financial reporting earnings, future reversals of existing taxable temporary differences, projected future taxable income, as well as any tax planning strategies. As of March 31, 2024 and 2023, the Company had available federal, state, and foreign net operating loss (“NOL carryforwards”) of $9.2 million and $13.7 million, respectively, that may be applied against future taxable income. The federal net operating loss of $1.2 million is primarily attributable to an acquisition and will begin to expire in fiscal 2037. The state net operating loss of $3.1 million is primarily attributable to losses in jurisdictions in which the Company does not file a consolidated return. The foreign net operating loss of $4.9 million is primarily attributable to operations in jurisdictions where the Company has not historically been profitable. The Company recorded a partial val uation allowance against those federal, state and foreign net operating losses it believes will expire prior to utilization. Uncertain Tax Positions The Company maintains reserves for uncertain tax positions related to unrecognized income tax benefits. These reserves involve considerable judgment a nd estimation and are evaluated by management based on the best information available including changes in tax laws and other information. As of March 31, 2024, 2023, and 2022, the Company has recorded $115.4 million, $552.3 million, and $79.9 million, respectively, of reserves for uncertain tax positions which include potential tax benefits of $104.2 million, $91.1 million, and $78.5 million, respectively, that, when recognized, impact the effective tax rate. As of March 31, 2024 and 2023, $1.4 million and $3.0 million, respectively, of the reserve is reflected as a reduction to deferred taxes and the remaining balance is recorded as a component of other long-term liabilities in the consolidated balance sheet. A reconciliation of the beginning and ending amount of potential tax benefits for the periods presented is as follows:
|  | March 31,
|  | 2024 |  | 2023 |  | 2022
Beginning of year |  | $ | 547,885 |  |  | $ | 78,519 |  |  | $ | 62,742 |
Increases in prior year position |  | 40,704 |  |  | — |  |  | 2,620 |
Increases in current year position |  | 13,352 |  |  | 470,881 |  |  | 13,530 |
Decreases in prior year position |  | (473,848) |  |  | (1,328) |  |  | (373) |
Settlements with taxing authorities |  | (23,696) |  |  | — |  |  | — |
Lapse of statute of limitations |  | (234) |  |  | (187) |  |  | — |
End of year |  | $ | 104,163 |  |  | $ | 547,885 |  |  | $ | 78,519 |
The Company recognized accrued interest and penalties of $7.4 million, $2.9 million and $1.7 million for fiscal 2024, 2023, and 2022, respectively, related to the reserves for uncertain tax positions in the income tax provision. Included in the total reserve for uncertain tax positions are accrued penalties and interest of approximately $13.2 million, $5.8 million and $2.9 million at March 31, 2024, 2023, and 2022, respectively. The Company is subject to taxation in the United States and various state and foreign jurisdictions. As of March 31, 2024, the Company's tax years ended March 31, 2016 and forward are open and subject to examination by the federal tax authorities. The other jurisdictions currently open or under examination are not considered to be material. During fiscal 2023, the Company recognized an increase in reserves for uncertain tax positions related to an increase in research and development tax credits available, as in prior years, and the required capitalization of research and development expenditures, which became effective in fiscal 2023. The uncertain tax positions related to the capitalization of research and development expenditures were offset by a deferred tax asset. During fiscal 2024, the Company completed a detailed study of its research and development expenditures and confirmed management's position that only certain contracts and activities are required to be capitalized and amortized under the rules enacted as part of the Tax Cuts and Jobs Act of 2017, specifically Section 174. This was further supported by guidance issued by the Internal Revenue Service in September and December 2023. As a result, the Company reversed its uncertain tax position reserve related to Section 174 with a corresponding decrease to deferred tax assets. Dur ing fiscal 2024, the Company also recognized an increase in reserves for uncertain tax position reserve related to research and development tax credits, as in prior years. In the fourth quarter of fiscal 2024, the Company received an unfavorable ruling from the District of Columbia Court of Appeals related to contested tax assessments from the District of Columbia Office of Tax and Revenue (“DC OTR”) for fiscal years 2013 through 2015. As previously disclosed, no reserves had previously been accrued related to this matter and as such, $42.7 million of income tax expense has been recorded in the fiscal 2024 consolidated statement of operations, which reflects the tax liability including interest and penalties, net of federal benefit. This expense is related to the years at issue in the litigation, which were previously paid under protest, and the subsequent periods in which the position had been taken. The Company has filed amended tax returns related to these subsequent periods and paid $13.2 million of incremental cash taxes in the fourth quarter of fiscal 2024. The remaining $10.5 million of settlements with taxing authorities was previously paid.

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