XML 30 R16.htm IDEA: XBRL DOCUMENT
v3.10.0.1

Income Taxes | 6 Months Ended
--- | ---
Jul. 29, 2018
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes The Company’s effective tax rate differs from the statutory federal income tax rate of 21% primarily due to regional mix of income and a partial release of the valuation allowance in the U.S. The valuation allowance was released in the first quarter of fiscal year 2019 as a result of the Company obtaining the information necessary to evaluate the impact of the Global Intangible Low-Taxed Income (“GILTI”) provisions, enacted as part of the Tax Cuts and Jobs Act (“Tax Act”) on December 22, 2017. This item was left open under Staff Accounting Bulletin 118 (“SAB 118”) in the financial statements for the year ended January 28, 2018 and the Company has now made a reasonable estimate based on the most current information available. The Tax Act made significant changes to U.S. income tax laws, including transitioning from a worldwide tax system to a territorial tax system. This change in the U.S. international tax system included the introduction of several new tax regimes that are effective as of January 1, 2018, including the GILTI provisions. The GILTI provisions effectively tax the foreign earnings of U.S. multinational companies at 10.5%, half the current corporate tax rate. During the three months ended April 29, 2018, the Company finalized its analysis regarding the interplay of the foreign tax credits associated with this income, which are allowed against the U.S. tax liability generated as a result of the GILTI provision, and the potential impact on the related valuation allowance. As a result, the Company recorded a tax benefit of $15.8 million during the first quarter of fiscal year 2019 related to the reduction of the valuation allowance on certain U.S. deferred tax assets generated prior to fiscal year 2019. While management believes the provisional amounts recorded during the six months ended July 29, 2018 and the year ended January 28, 2018 represent reasonable estimates of the ultimate impact U.S. tax reform will have on the Company's consolidated financial statements, it is possible the Company may continue to materially adjust these amounts for related administrative guidance, notices, implementation regulations, potential legislative amendments and interpretations as the Tax Act continues to evolve. These adjustments could have an impact on the Company's Balance Sheets and Statements of Income. The Company uses a two-step approach to recognize and measure uncertain tax positions ("UTP"). The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon ultimate settlement. A reconciliation of the beginning and ending amount of gross unrecognized tax benefits (before the federal impact of state items) is as follows:
(in thousands) |
Balance at January 28, 2018 | $ | 16,059 |
Additions based on tax positions related to the current year | 855 |
Balance as of July 29, 2018 | $ | 16,914 |
Included in the balance of gross unrecognized tax benefits at July 29, 2018 and January 28, 2018, are $4.7 million and $3.9 million, respectively, of net tax benefits (after federal impact of state items), that, if recognized, would impact the effective tax rate, prior to consideration of any required valuation allowance. The liability for UTP is reflected within the Balance Sheets as follows:
(in thousands) | July 29, 2018 |  | January 28, 2018
Deferred tax assets - non-current | $ | 12,236 |  |  | $ | 12,135 |
Other long-term liabilities | 4,678 |  |  | 3,924 |
Total accrued taxes | $ | 16,914 |  |  | $ | 16,059 |
The Company’s policy is to include net interest and penalties related to unrecognized tax benefits within the "Provision for taxes" in the Statements of Income. Tax years prior to 2013 (the Company’s fiscal year 2014) are generally not subject to examination by the U.S. Internal Revenue Service ("IRS") except for items involving tax attributes that have been carried forward to tax years whose statute of limitations remains open. For state returns, the Company is generally not subject to income tax examinations for calendar years prior to 2012 (the Company’s fiscal year 2013). The Company has a significant tax presence in Switzerland for which Swiss tax filings have been examined through fiscal year 2017. The Company is also subject to routine examinations by various foreign tax jurisdictions in which it operates. The Company believes that adequate provisions have been made for any adjustments that may result from tax examinations. However, the outcome of tax audits cannot be predicted with certainty. If any issues addressed in the Company’s tax audits are resolved in a manner not consistent with the Company's expectations, the Company could be required to adjust its provision for income taxes in the period such resolution occurs. The Company’s regional income from continuing operations before taxes and equity in net losses of equity method investments is as follows:
| Three Months Ended |  | Six Months Ended
(in thousands) | July 29, 2018 |  | July 30, 2017 |  | July 29, 2018 |  | July 30, 2017
Domestic | $ | (3,524 | ) |  | $ | (4,863 | ) |  | $ | (11,224 | ) |  | $ | (9,030 | )
Foreign | 34,802 |  |  | 21,522 |  |  | 37,405 |  |  | 41,267 |
Total | $ | 31,278 |  |  | $ | 16,659 |  |  | $ | 26,181 |  |  | $ | 32,237 |

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