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Income Taxes (Tables) | 12 Months Ended
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Jan. 26, 2020
Income Tax Disclosure [Abstract] |
Schedule of regional income before income taxes | The Company's regional income before income taxes and equity in net gains (losses) of equity method investments was as follows:
| Fiscal Year Ended
(in thousands) | January 26, 2020 |  | January 27, 2019 |  | January 28, 2018
Domestic | $ | (24,530 | ) |  | $ | (13,667 | ) |  | $ | (16,585 | )
Foreign | 69,115 |  |  | 83,787 |  |  | 74,341 |
Total | $ | 44,585 |  |  | $ | 70,120 |  |  | $ | 57,756 |
Schedule of components of income tax expense | The provision for income taxes consisted of the following:
| Fiscal Year Ended
(in thousands) | January 26, 2020 |  | January 27, 2019 |  | January 28, 2018
Current income tax provision (benefit) |  |  |  |  |
Federal | $ | 6,463 |  |  | $ | (147 | ) |  | $ | 2,108 |
State | 100 |  |  | — |  |  | — |
Foreign | 11,861 |  |  | 21,753 |  |  | 13,442 |
Subtotal | 18,424 |  |  | 21,606 |  |  | 15,550 |
Deferred income tax provision (benefit) |  |  |  |  |
Federal | 74 |  |  | (24,928 | ) |  | 7,363 |
State | (33 | ) |  | — |  |  | — |
Foreign | (5,637 | ) |  | 3,677 |  |  | (60 | )
Subtotal | (5,596 | ) |  | (21,251 | ) |  | 7,303 |
Provision for income taxes | $ | 12,828 |  |  | $ | 355 |  |  | $ | 22,853 |
Schedule of income tax reconciliation | The provision for income taxes reconciles to the amount computed by applying the statutory federal rate to income before taxes as follows:
| Fiscal Year Ended
(in thousands) | January 26, 2020 |  | January 27, 2019 |  | January 28, 2018
Federal income tax at statutory rate | $ | 9,328 |  |  | $ | 14,725 |  |  | $ | 19,591 |
State income taxes, net of federal benefit | 68 |  |  | (55 | ) |  | (159 | )
Foreign taxes differential | (966 | ) |  | 2,910 |  |  | (8,698 | )
Tax credits generated | (2,026 | ) |  | (3,344 | ) |  | (3,278 | )
Changes in valuation allowance | (2,722 | ) |  | (23,029 | ) |  | (41,911 | )
Gain on intra-entity asset transfer | 6,802 |  |  | — |  |  | — |
Changes in uncertain tax positions | 8,636 |  |  | 2,219 |  |  | 1,538 |
Equity compensation | (6,008 | ) |  | 786 |  |  | (8,040 | )
Permanent differences | — |  |  | — |  |  | 264 |
GILTI and Subpart F income | 538 |  |  | 1,164 |  |  | 299 |
Impact of U.S. tax reform (1) | — |  |  | 1,904 |  |  | 65,442 |
Other | (822 | ) |  | 3,075 |  |  | (2,195 | )
Provision for income taxes | $ | 12,828 |  |  | $ | 355 |  |  | $ | 22,853 |
(1) During fiscal year 2020, the Company continued to maintain a valuation allowance against foreign tax credits. The impact of the U.S. tax reform for fiscal year 2019 included a tax benefit from the overall reduction to the transition tax of approximately $5.0 million and a tax expense from the reduction to foreign tax credits of approximately $6.9 million. The impact of the U.S. tax reform for fiscal year 2018 includes $66.5 million of expense due to the estimated impact of the transition tax, net of foreign tax credits generated.
Schedule of components of deferred tax assets and liabilities | The components of the net deferred income tax assets and liabilities at January 26, 2020 and January 27, 2019 were as follows:
(in thousands) | January 26, 2020 |  | January 27, 2019
Non-current deferred tax assets: |  |  |
Inventory reserve | 4,147 |  |  | 4,984 |
Bad debt reserve | 20 |  |  | 17 |
Foreign tax credits | 1,331 |  |  | 2,996 |
Research credit carryforward | 6,063 |  |  | 6,693 |
NOL carryforward | 7,659 |  |  | 8,773 |
Payroll and related accruals | 9,383 |  |  | 8,133 |
Share-based compensation | 5,607 |  |  | 14,047 |
Foreign pension deferred | 2,070 |  |  | 832 |
Accrued sales reserves | 746 |  |  | 763 |
Research and development charges | 2,864 |  |  | — |
Goodwill and other intangibles | 2,875 |  |  | — |
Leasing deferred assets | 2,396 |  |  | — |
Other deferred assets | 1,713 |  |  | 1,031 |
Valuation allowance | (16,189 | ) |  | (18,912 | )
Total non-current deferred tax assets | 30,685 |  |  | 29,357 |
Non-current deferred tax liabilities: |  |  |
Goodwill and other intangibles | — |  |  | (3,227 | )
Property, plant and equipment | (6,034 | ) |  | (6,482 | )
Repatriation of foreign earnings | (4,323 | ) |  | (8,158 | )
Leasing deferred liabilities | (2,285 | ) |  | — |
Other non-current deferred tax liabilities | (1,549 | ) |  | (592 | )
Total non-current deferred tax liabilities | (14,191 | ) |  | (18,459 | )
Net deferred tax assets | $ | 16,494 |  |  | $ | 10,898 |
Summary of changes in the valuation allowance | Changes in the valuation allowance for the three years ended January 26, 2020 are summarized in the table below:
| Fiscal Year Ended
(in thousands) | January 26, 2020 |  | January 27, 2019 |  | January 28, 2018
Beginning balance | $ | 18,912 |  |  | $ | 41,050 |  |  | $ | 82,961 |
Additions | 159 |  |  | 152 |  |  | 74 |
Releases | (2,882 | ) |  | (22,290 | ) |  | (41,985 | )
Ending balance | $ | 16,189 |  |  | $ | 18,912 |  |  | $ | 41,050 |
Schedule of gross unrecognized tax benefits | A reconciliation of the beginning and ending amount of gross unrecognized tax benefits (before federal impact of state items) is as follows:
| Fiscal Year Ended
(in thousands) | January 26, 2020 |  | January 27, 2019
Beginning balance | $ | 18,293 |  |  | $ | 16,059 |
Net additions based on tax positions related to the current year | 2,252 |  |  | 2,642 |
Additions based on tax positions related to prior years | 6,850 |  |  | — |
Reductions as a result of lapsed statutes | (399 | ) |  | — |
Reductions for settlements with tax authorities | (1,530 | ) |  | (408 | )
Ending balance | $ | 25,466 |  |  | $ | 18,293 |
Schedule of liability for uncertain tax positions | The liability for UTP is reflected on the Balance Sheets as follows:
| Fiscal Year Ended
(in thousands) | January 26, 2020 |  | January 27, 2019
Deferred tax assets - non-current | $ | 15,575 |  |  | $ | 12,492 |
Other long-term liabilities | 8,555 |  |  | 4,479 |
Total accrued taxes | $ | 24,130 |  |  | $ | 16,971 |

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