XML 38 R21.htm IDEA: XBRL DOCUMENT
v3.23.3

Note 12 Income Tax | 12 Months Ended
--- | ---
Sep. 30, 2023
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, 2023 |  | October 1, 2022 |  | October 2, 2021
| (In thousands)
Domestic | $ | 157,548 |  |  | $ | 145,671 |  |  | $ | 174,936 |
Foreign | 255,259 |  |  | 156,649 |  |  | 106,705 |
Total | $ | 412,807 |  |  | $ | 302,320 |  |  | $ | 281,641 |
The provision for income taxes consists of the following:
| Year Ended
| September 30, 2023 |  | October 1, 2022 |  | October 2, 2021
| (In thousands)
Federal: |  |  |  |  |
Current | $ | 362 |  |  | $ | 1,070 |  |  | $ | 705 |
Deferred | 36,431 |  |  | 25,399 |  |  | 28,809 |
State: |  |  |  |  |
Current | 3,188 |  |  | 1,711 |  |  | 3,677 |
Deferred | 3,329 |  |  | 3,081 |  |  | (302) |
Foreign: |  |  |  |  |
Current | 53,346 |  |  | 31,241 |  |  | (906) |
Deferred | (11,362) |  |  | (566) |  |  | 112 |
Total provision for income taxes | $ | 85,294 |  |  | $ | 61,936 |  |  | $ | 32,095 |
The Company's provision for income taxes for 2023, 2022 and 2021 was $85 million (21% of income before taxes), $62 million (20% of income before taxes) and $32 million (11% of income before taxes), respectively. The effective tax rates for 2023, 2022 and 2021 were lower than the expected U.S. statutory rate of 21% primarily due to a $12 million, $16 million and $43 million tax benefit, respectively, resulting from the release of certain foreign tax reserves due to lapse of time and expiration of statutes of limitations. In connection with the sale of shares of Sanmina SCI India Private Limited ("SIPL") to Reliance Strategic Business Ventures Limited ("RSBVL") on October 3, 2022, the Company recognized tax expense of $6 million for the year ended September 30, 2023, which was allocated to additional paid-in-capital. See Note 18 "Strategic Transactions". 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, 2023 |  | October 1, 2022
| (In thousands)
Deferred tax assets: |  |  |
U.S. net operating loss carryforwards | $ | 51,741 |  |  | $ | 92,882 |
Foreign net operating loss carryforwards | 109,089 |  |  | 109,416 |
Intangibles | 17,921 |  |  | 25,099 |
Accruals not currently deductible | 43,831 |  |  | 44,963 |
Property, plant and equipment | 28,932 |  |  | 27,514 |
Tax credit carryforwards | 20,235 |  |  | 18,465 |
Reserves not currently deductible | 23,341 |  |  | 14,939 |
Stock compensation expense | 6,049 |  |  | 6,365 |
Federal benefit of foreign operations | 22,486 |  |  | 21,312 |
Capitalized research and development | 4,965 |  |  | — |
Lease deferred tax asset | 16,987 |  |  | 15,018 |
Other | 2,720 |  |  | 2,753 |
Valuation allowance | (116,075) |  |  | (118,210) |
Total deferred tax assets | 232,222 |  |  | 260,516 |
Deferred tax liabilities on undistributed earnings | (14,775) |  |  | (14,775) |
Deferred tax liabilities on branch operations | (24,001) |  |  | (24,182) |
Revenue recognition | (1,874) |  |  | (1,572) |
Lease deferred tax liability | (16,671) |  |  | (14,808) |
Net deferred tax assets | $ | 174,901 |  |  | $ | 205,179 |
Recorded as: |  |  |
Deferred tax assets | $ | 177,597 |  |  | $ | 209,554 |
Deferred tax liabilities | (2,696) |  |  | (4,375) |
Net deferred tax assets | $ | 174,901 |  |  | $ | 205,179 |
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. The Company’s valuation allowance as of September 30, 2023 relates primarily to foreign net operating losses, except for $14 million related to U.S. state net operating losses. The Company provides deferred tax liabilities for the tax consequences associated with the undistributed earnings that are expected to be repatriated to the subsidiaries' parent unless the subsidiaries' earnings are considered indefinitely reinvested. As of September 30, 2023, income taxes and foreign withholding taxes have not been provided for approximately $490 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, 2023, the Company has cumulative net operating loss carryforwards for federal, state and foreign tax purposes of $155 million, $337 million and $433 million, respectively. The federal and state net operating loss carryforwards begin expiring in fiscal years 2028 and 2024, respectively, and expire at various dates through September 29, 2035. Certain foreign net operating losses will begin expiring in 2024. However, the majority of foreign net operating losses carryforward indefinitely. As of September 30, 2023, the Company has federal tax credits of $18 million that expire between 2031 and 2043. There are certain 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. Following is a reconciliation of the statutory federal tax rate to the Company's effective tax rate:
| Year Ended
| September 30, 2023 |  | October 1, 2022 |  | October 2, 2021
Federal tax at statutory tax rate | 21.00 | % |  | 21.00 | % |  | 21.00 | %
Effect of foreign operations | 0.81 |  |  | 3.52 |  |  | 7.99 |
Permanent items | 0.96 |  |  | 0.08 |  |  | (2.03) |
Federal credits | (0.57) |  |  | (0.73) |  |  | (0.54) |
Other | 0.06 |  |  | 0.59 |  |  | (0.20) |
State income taxes, net of federal benefit | 1.43 |  |  | 1.60 |  |  | 0.91 |
Release of foreign tax reserves | (3.03) |  |  | (5.57) |  |  | (15.73) |
Effective tax rate | 20.66 | % |  | 20.49 | % |  | 11.40 | %
A reconciliation of the beginning and ending amount of total liabilities for unrecognized tax benefits, excluding accrued penalties and interest, is as follows:
| Year Ended
| September 30, 2023 |  | October 1, 2022 |  | October 2, 2021
| (In thousands)
Balance, beginning of year | $ | 53,552 |  |  | $ | 67,781 |  |  | $ | 74,612 |
Increase (decrease) related to prior year tax positions | (331) |  |  | (4,456) |  |  | 6,063 |
Increase related to current year tax positions | 2,040 |  |  | 7,154 |  |  | 7,349 |
Settlements | (1,911) |  |  | (7,596) |  |  | — |
Decrease related to lapse of time and expiration of statutes of limitations | (8,643) |  |  | (9,331) |  |  | (20,243) |
Balance, end of year | $ | 44,707 |  |  | $ | 53,552 |  |  | $ | 67,781 |
The Company had reserves of $8 million and $11 million as of September 30, 2023 and October 1, 2022, respectively, for the payment of interest and penalties relating to unrecognized tax benefits. During 2023, the Company recognized an income tax benefit for interest and penalties of $4 million due to lapse of time and expiration of statutes of limitations compared to an income tax benefit of $3 million in 2022. The Company recognizes interest and penalties related to liabilities for 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 of $34 million in 2023. 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 (“IRS”) for fiscal years 2008 through 2010. On September 26, 2023, the Company received a final Notice of Proposed Adjustment from the IRS related to a worthless stock deduction and disallowance of the resulting net operating loss carryforward in the 2009 fiscal year. The Company disagrees with the IRS’s proposed adjustment and intends to vigorously contest this matter through the applicable IRS administrative and judicial procedures, as appropriate. In the future, the Company expects to receive a Revenue Agent Report including the IRS’s calculation of the tax assessment related to this matter. Although the final resolution of this proposed adjustment remains uncertain, the Company continues to believe that it is more likely than not the Company’s tax position will be sustained. An unfavorable resolution of this matter could have a material, adverse impact on the Company’s Consolidated Financial Statements. 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 2006 in its major foreign jurisdictions. It is reasonably possible that the balance of gross unrecognized tax benefits could decrease in the next 12 months by approximately $5 million related to payments, the resolution of audits and expiration of statutes of limitations. In addition, there could be a corresponding decrease in accrued interest and penalties of approximately $2 million.

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 -Topic 946 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 13 -Publisher FASB -URI https://asc.fasb.org//1943274/2147480990/946-20-50-13 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 235 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//740/tableOfContent Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 14 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-14 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-21 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 270 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482526/740-270-50-1 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 17 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-17 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479360/740-10-S99-1 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479360/740-10-S99-2 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 30 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482603/740-30-50-2 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration