XML 33 R15.htm IDEA: XBRL DOCUMENT
v3.8.0.1

Note 8 Income Tax | 12 Months Ended
--- | ---
Sep. 30, 2017
Income Tax Disclosure [Abstract] |
Income Tax Disclosure [Text Block] | Income Taxes Domestic and foreign components of income before income taxes were as follows:
| Year Ended
| September 30, 2017 |  | October 1, 2016 |  | October 3, 2015
| (In thousands)
Domestic | $ | 128,493 |  |  | $ | 138,138 |  |  | $ | 91,613 |
Foreign | 84,987 |  |  | 66,479 |  |  | 84,580 |
Total | $ | 213,480 |  |  | $ | 204,617 |  |  | $ | 176,193 |
The provision for (benefit from) income taxes consists of the following:
| Year Ended
| September 30, 2017 |  | October 1, 2016 |  | October 3, 2015
| (In thousands)
Federal: |  |  |  |  |
Current | $ | (2,524 | ) |  | $ | 490 |  |  | $ | 1,413 |
Deferred | 37,543 |  |  | (4,550 | ) |  | (226,225 | )
State: |  |  |  |  |
Current | 1,648 |  |  | (265 | ) |  | 543 |
Deferred | 4,204 |  |  | (5,141 | ) |  | (513 | )
Foreign: |  |  |  |  |
Current | 37,076 |  |  | 32,427 |  |  | 42,295 |
Deferred | (3,300 | ) |  | (6,182 | ) |  | (18,581 | )
Total provision for (benefit from) income taxes | $ | 74,647 |  |  | $ | 16,779 |  |  | $ | (201,068 | )
The tax effects of temporary differences that give rise to significant portions of deferred tax assets and liabilities are as follows:
| As of
| September 30, 2017 |  | October 1, 2016
| (In thousands)
Deferred tax assets: |  |  |
U.S. net operating loss carryforwards | $ | 338,492 |  |  | $ | 373,933 |
Foreign net operating loss carryforwards | 186,684 |  |  | 199,313 |
Acquisition related intangibles | 13,913 |  |  | 28,928 |
Accruals not currently deductible | 55,582 |  |  | 59,879 |
Property, plant and equipment | 20,746 |  |  | 9,939 |
Tax credit carryforwards | 11,832 |  |  | 14,191 |
Reserves not currently deductible | 21,710 |  |  | 27,626 |
Stock compensation expense | 21,151 |  |  | 20,617 |
Unrealized losses | 4,475 |  |  | 4,475 |
Other | 3,949 |  |  | 2,730 |
Valuation allowance | (163,267 | ) |  | (176,422 | )
Total deferred tax assets | 515,267 |  |  | 565,209 |
Deferred tax liabilities on foreign earnings | (36,027 | ) |  | (37,122 | )
Other deferred tax liabilities | (8,140 | ) |  | (19,228 | )
Net deferred tax assets | $ | 471,100 |  |  | $ | 508,859 |
Recorded as: |  |  |
Non-current deferred tax assets | $ | 476,554 |  |  | $ | 514,314 |
Non-current deferred tax liabilities | (5,454 | ) |  | (5,455 | )
Net deferred tax assets | $ | 471,100 |  |  | $ | 508,859 |
The Company offsets deferred tax assets and liabilities by tax-paying jurisdiction. The resulting net amounts by tax jurisdiction are then aggregated without further offset. A valuation allowance is established or maintained when, based on currently available information and other factors, it is more likely than not that all or a portion of the deferred tax assets will not be realized. The Company regularly assesses its valuation allowance against deferred tax assets on a jurisdiction by jurisdiction basis. The Company considers all available positive and negative evidence, including future reversals of temporary differences, projected future taxable income, tax planning strategies and recent financial results. Significant judgment is required in assessing the Company's ability to generate revenue, gross profit, operating income and jurisdictional taxable income in future periods. Prior to 2012, based on negative evidence (primarily a cumulative history of operating losses), the Company had a full valuation allowance against its net deferred tax assets in the U.S. and certain foreign jurisdictions. In 2012 through 2016, the Company released a portion of its U.S. valuation allowances each year in recognition of its improved historical earnings and increasing future projected earnings. The Company released $96.2 million and $288.7 million of the valuation allowance attributable to U.S. and foreign deferred tax assets in 2016 and 2015, respectively. As of October 1, 2016 and September 30, 2017, the Company no longer had a valuation allowance against its U.S. deferred tax assets. The valuation allowance as of September 30, 2017 relates primarily to foreign net operating losses, with the exception of $17.6 million related to U.S. state net operating losses. As of September 30, 2017, U.S. income taxes have not been provided for approximately $571.4 million of cumulative undistributed earnings of several non-U.S. subsidiaries. The Company intends to reinvest these earnings indefinitely in operations outside of the U.S. Determination of the amount of unrecognized deferred tax liabilities on these undistributed earnings is not practicable. As of September 30, 2017, the Company has cumulative net operating loss carryforwards for federal, state and foreign tax purposes of $1.0 billion, $633.8 million and $744.9 million, respectively. The federal and state net operating loss carryforwards begin expiring in 2023 and 2018, respectively, and expire at various dates through 2033. Certain foreign net operating losses start expiring in 2018. However, the majority of foreign net operating losses carryforward indefinitely. The Tax Reform Act of 1986 and similar state provisions impose restrictions on the utilization of net operating loss and tax credit carryforwards in the event of an “ownership change” as defined in the Internal Revenue Code. The utilization of certain net operating losses may be restricted due to changes in ownership and business operations. The Company is prohibited from recognizing a deferred tax asset for excess tax benefits related to stock and stock option plans that have not been realized through the reduction in income taxes payable. Such unrecognized deferred tax benefit as of September 30, 2017 was $126.6 million on a pre-tax basis and will be recognized upon the Company’s adoption of ASU 2016-09, Improvements to Employee Share-based Accounting, in 2018 with a corresponding increase to retained earnings. Following is a reconciliation of the statutory federal tax rate to the Company's effective tax rate:
| Year Ended
| September 30, 2017 |  | October 1, 2016 |  | October 3, 2015
Federal tax at statutory tax rate | 35.00 | % |  | 35.00 | % |  | 35.00 | %
Effect of foreign operations | 1.89 |  |  | 5.35 |  |  | 3.82 |
Foreign income inclusion | 0.26 |  |  | 9.43 |  |  | 0.21 |
Permanent items | 2.10 |  |  | (0.29 | ) |  | 2.05 |
Release of valuation allowance | — |  |  | (47.10 | ) |  | (163.92 | )
Discrete benefit of foreign restructuring | (4.92 | ) |  | — |  |  | — |
Other | (2.10 | ) |  | 4.61 |  |  | 4.41 |
State income taxes, net of federal benefit | 2.72 |  |  | 1.18 |  |  | 4.31 |
Effective tax rate | 34.95 | % |  | 8.18 | % |  | (114.12 | )%
A reconciliation of the beginning and ending amount of total unrecognized tax benefits, excluding accrued penalties and interest, is as follows:
| Year Ended
| September 30, 2017 |  | October 1, 2016 |  | October 3, 2015
| (In thousands)
Balance, beginning of year | $ | 55,773 |  |  | $ | 51,158 |  |  | $ | 54,237 |
Increase (decrease) related to prior year tax positions | 1,508 |  |  | (2,413 | ) |  | (5,044 | )
Increase related to current year tax positions | 9,741 |  |  | 7,028 |  |  | 5,564 |
Settlements | — |  |  | — |  |  | (3,599 | )
Balance, end of year | $ | 67,022 |  |  | $ | 55,773 |  |  | $ | 51,158 |
The Company had reserves of $40.2 million and $35.9 million as of September 30, 2017 and October 1, 2016, respectively, for the payment of interest and penalties relating to unrecognized tax benefits. The Company recorded interest and penalties related to unrecognized tax benefits of $4.3 million in 2017, $3.7 million in 2016 and $3.9 million in 2015. The Company recognizes interest and penalties related to unrecognized tax benefits as a component of income tax expense. Should the Company be able to ultimately recognize all of these uncertain tax positions, it would result in a benefit to net income and a reduction of the effective tax rate. The Company conducts business globally and, as a result, files income tax returns in the United States federal jurisdiction and various state and foreign jurisdictions. In the normal course of business, the Company is subject to examination by taxing authorities throughout the world. The Company is currently being audited by the Internal Revenue Service for tax years 2008 through 2010. To the extent the final tax liabilities are different from the amounts accrued, this would result in an increase or decrease in net operating loss carryforwards which would impact tax expense. Additionally, the Company is being audited by various state tax agencies and certain foreign countries. To the extent the final tax liabilities are different from the amounts accrued, the increases or decreases would be recorded as income tax expense or benefit in the consolidated statements of income. Although the Company believes that the resolution of these audits will not have a material adverse impact on the Company’s results of operations, the outcome is subject to uncertainty. In general, the Company is no longer subject to United States federal or state income tax examinations for years before 2003, and to foreign examinations for years prior to 2003 in its major foreign jurisdictions. Although the timing of the resolution of audits is highly uncertain, it is reasonably possible that the balance of gross unrecognized tax benefits could significantly change in the next 12 months. However, given the number of years subject to audit and the number of matters being examined, the Company is unable to estimate the full range of possible adjustments to the balance of gross unrecognized tax benefits.

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 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration