XML 58 R24.htm IDEA: XBRL DOCUMENT
v2.4.1.9

Income Taxes | 12 Months Ended
--- | ---
Jan. 03, 2015
Income Taxes |
Income Taxes | 17. Income Taxes Significant components of the provision for income taxes are as follows (in thousands):
|  | Year Ended |
|  | January 3, 2015 |  | December 28, 2013 |  | December 29, 2012 |
Current: |  |  |  |  |  |  |  |  |  |
Domestic |  | $ | 7,083 |  | $ | 4,796 |  | $ | 21,084 |
International |  |  | 882 |  |  | 4,093 |  |  | (3,009 | )
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Total Current |  |  | 7,965 |  |  | 8,889 |  |  | 18,075 |
Deferred: |  |  |  |  |  |  |  |  |  |
Domestic |  |  | 2,352 |  |  | 5,591 |  |  | 5,444 |
International |  |  | 702 |  |  | (2,272 | ) |  | (719 | )
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Total Deferred |  |  | 3,054 |  |  | 3,319 |  |  | 4,725 |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
|  | $ | 11,019 |  | $ | 12,208 |  | $ | 22,800 |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
The Company's provision for income taxes differs from the expected tax expense amount computed by applying the statutory federal income tax rate to income before income taxes as a result of the following:
|  | Year Ended |
|  | January 3, 2015 |  | December 28, 2013 |  | December 29, 2012 |
Federal statutory rate |  |  | 35.0 | % |  | 35.0 | % |  | 35.0 | %
Foreign tax rate benefit |  |  | (3.5 | ) |  | (8.2 | ) |  | (11.8 | )
Research and development tax credits |  |  | (8.6 | ) |  | (12.8 | ) |  | (0.5 | )
Release of prior year unrecognized tax benefits |  |  | (2.6 | ) |  | — |  |  | (8.4 | )
Intercompany technology license |  |  | — |  |  | — |  |  | 11.8 |
Excess officer compensation |  |  | 2.3 |  |  | 1.9 |  |  | 1.0 |
Change in prior period valuation allowance |  |  | (1.4 | ) |  | 3.1 |  |  | — |
Other |  |  | 1.3 |  |  | 0.7 |  |  | (0.7 | )
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
|  |  | 22.5 | % |  | 19.7 | % |  | 26.4 | %
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
The effective tax rate for fiscal 2014 increased from fiscal 2013, primarily due to the recognition of the fiscal 2012 federal research and development tax credit in fiscal 2013 due to the enactment of the American Taxpayer Relief Act of 2012 on January 2, 2013, as well as a decrease in the foreign tax rate benefit in fiscal 2014. This increase in the effective tax rate was partially offset by the reduction to a valuation allowance recorded in a prior year related to certain state loss and research and development tax credit carryforwards and the release in fiscal 2014 of prior year unrecognized tax benefits due to the lapse of the statute of limitations applicable to a tax deduction claimed on a prior year foreign tax return. The effective tax rate for fiscal 2013 decreased from fiscal 2012, primarily due to the fiscal 2012 tax charge related to the intercompany license of certain technology associated with the acquisition of Ember during fiscal 2012 and the recognition of the fiscal 2012 and fiscal 2013 federal research and development tax credits in fiscal 2013 as a result of the enactment of the American Taxpayer Relief Act of 2012 (the "Act") on January 2, 2013. The decrease in the effective tax rate for fiscal 2013 was partially offset by the release during fiscal 2012 of unrecognized tax benefits that were determined to be effectively settled during fiscal 2012. Income before income taxes included the following components (in thousands):
|  | Year Ended |
|  | January 3, 2015 |  | December 28, 2013 |  | December 29, 2012 |
Domestic |  | $ | 38,174 |  | $ | 41,849 |  | $ | 80,494 |
Foreign |  |  | 10,866 |  |  | 20,178 |  |  | 5,854 |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
|  | $ | 49,040 |  | $ | 62,027 |  | $ | 86,348 |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Foreign income before taxes decreased from fiscal 2013 to fiscal 2014 primarily due to an increase in fiscal 2014 of the fair value of the Company's acquisition-related contingent consideration liability. Foreign income before income taxes increased from fiscal 2012 to fiscal 2013 primarily due to intercompany technology license payments made by a foreign subsidiary in 2012. Deferred tax assets and liabilities are recorded for the estimated tax impact of temporary differences between the tax basis and book basis of assets and liabilities. A valuation allowance is established against a deferred tax asset when it is more likely than not that the deferred tax asset will not be realized. The Company recorded a new valuation allowance of $0.5 million in fiscal 2014 related to certain state research and development tax credit carryforwards generated in fiscal 2014. The Company has determined that it is more likely than not that a portion of these carryforwards will expire or go unutilized because the Company no longer expects to recognize sufficient income in the jurisdictions in which the attributes were created. The impact of this new valuation allowance was offset by a reduction of $0.6 million to a valuation allowance recorded in fiscal 2013 related to certain state loss and research and development tax credit carryforwards, resulting in a net valuation allowance reduction of $0.1 million reflected as a benefit to income tax expense in fiscal 2014. In addition, the Company recorded a reduction of $0.2 million to the fiscal 2013 valuation allowance related to the expiration of certain acquired state net operating loss carryforwards which were fully valued. Since this change was due to the expiration of the losses, the reduction to the valuation allowance was offset by a reduction in deferred tax assets rather than a charge to income tax expense. No valuation allowance was recorded against other deferred tax assets in fiscal 2014. Management believes that the Company's results of future operations will generate sufficient taxable income such that it is more likely than not that the remaining deferred tax assets will be realized. Significant components of the Company's deferred taxes as of January 3, 2015 and December 28, 2013 are as follows (in thousands):
|  | January 3, 2015 |  | December 28, 2013 |
Deferred tax assets: |  |  |  |  |  |  |
Net operating loss carryforwards |  | $ | 31,518 |  | $ | 38,399 |
Research and development tax credit carryforwards |  |  | 9,740 |  |  | 9,276 |
Stock-based compensation |  |  | 6,353 |  |  | 6,757 |
Capitalized research and development |  |  | 7,371 |  |  | 8,999 |
Deferred income on shipments to distributors |  |  | 8,117 |  |  | 5,733 |
Accrued liabilities and other |  |  | 6,481 |  |  | 8,302 |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
|  |  | 69,580 |  |  | 77,466 |
Less: Valuation allowance |  |  | (3,455 | ) |  | (3,775 | )
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
|  |  | 66,125 |  |  | 73,691 |
Deferred tax liabilities: |  |  |  |  |  |  |
Acquired intangible assets |  |  | 33,630 |  |  | 38,444 |
Depreciation and amortization |  |  | 3,388 |  |  | 2,022 |
Prepaid expenses and other |  |  | 1,517 |  |  | 1,889 |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
|  |  | 38,535 |  |  | 42,355 |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Net deferred tax assets |  | $ | 27,590 |  | $ | 31,336 |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
As of January 3, 2015, the Company had federal net operating loss and research and development tax credit carryforwards of approximately $64.9 million and $2.0 million, respectively, as a result of the Cygnal Integrated Products, Silicon Clocks, Spectra Linear and Ember acquisitions. These carryforwards expire in fiscal years 2020 through 2032. Recognition of these loss and credit carryforwards is subject to an annual limit, which may cause them to expire before they are used. As of January 3, 2015, the Company had foreign net operating loss carryforwards of approximately $21.6 million as a result of the Energy Micro acquisition. These loss carryforwards do not expire and recognition is not subject to an annual limit. The Company also had state loss and research and development tax credit carryforwards of approximately $57.9 million and $11.8 million, respectively. A portion of these loss and credit carryforwards was generated by the Company and a portion was acquired through the Integration Associates, Silicon Clocks, Spectra Linear and Ember acquisitions. Certain of these carryforwards expire in fiscal years 2015 through 2033 and others do not expire. Recognition of some of these loss and credit carryforwards is subject to an annual limit, which may cause them to expire before they are used. At the end of fiscal 2014, undistributed earnings of the Company's foreign subsidiaries of approximately $303.1 million are intended to be permanently reinvested outside the U.S. Accordingly, no provision for U.S. federal and state income taxes associated with a distribution of these earnings has been made. Determination of the amount of the unrecognized deferred tax liability on these unremitted earnings is not practicable. The Company's operations in Singapore are subject to reduced tax rates through 2019, as long as certain conditions are met. The income tax benefit (expense) from the reduced Singapore tax rate reflected in earnings was approximately $2.0 million (representing $0.05 per diluted share) in fiscal 2014, approximately $2.2 million (representing $0.05 per diluted share) in fiscal 2013, and approximately $(13.3) million (representing $(0.31) per diluted share) in fiscal 2012. The impact of the reduced Singapore tax rates in fiscal 2014 and fiscal 2012 reflect the recognition of prior year unrecognized tax benefits. The following table reflects changes in the unrecognized tax benefits (in thousands):
|  | Year Ended |
|  | January 3, 2015 |  | December 28, 2013 |  | December 29, 2012 |
Beginning balance |  | $ | 4,998 |  | $ | 4,364 |  | $ | 10,943 |
Additions based on tax positions related to current year |  |  | 465 |  |  | 316 |  |  | 1,818 |
Additions based on tax positions related to prior years |  |  | 58 |  |  | 318 |  |  | — |
Reductions for tax positions related to prior years |  |  | (1,592 | ) |  | — |  |  | (8,397 | )
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Ending balance |  | $ | 3,929 |  | $ | 4,998 |  | $ | 4,364 |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
As of January 3, 2015, December 28, 2013 and December 29, 2012, the Company had gross unrecognized tax benefits of $3.9 million, $5.0 million, and $4.4 million, respectively, of which $4.0 million, $4.8 million, and $4.1 million, respectively, would affect the effective tax rate if recognized. During fiscal 2014, the Company had gross increases of $0.5 million to its current and prior year unrecognized tax benefits, as well as gross decreases of $1.3 million to its prior year unrecognized tax benefits related to an uncertain tax position that was closed by statute. In addition, there was a reduction of $0.3 million due to foreign currency remeasurement adjustments related to prior year unrecognized tax benefits which were recognized in other income (expense), net. During fiscal 2013, the Company had gross increases of $0.6 million. During fiscal 2012, the Company had gross increases of $1.8 million to its current year unrecognized tax benefits, as well as a gross decrease of $8.4 million to its prior year unrecognized tax benefits related to an uncertain tax position that was determined to be effectively settled. A portion of these amounts in fiscal 2012 represents foreign currency remeasurement adjustments and was recognized in other income (expense), net. The Company recognizes interest and penalties related to unrecognized tax benefits in the provision for income taxes. The Company recognized less than $0.1 million of interest in the provision for income taxes in both fiscal 2014 and fiscal 2013. The Company did not recognize interest in the provision for income taxes in fiscal 2012. The Company has an accrual of less than $0.1 million for the payment of interest related to unrecognized tax positions at the end of both fiscal 2014 and fiscal 2013, with no such accrual at the end of fiscal 2012. The Company believes it is reasonably possible that the gross unrecognized tax benefits will decrease by approximately $0.6 million in the next 12 months due to the lapse of the statute of limitations applicable to a tax deduction claimed on a prior year foreign tax return. The tax years 2010 through 2014 remain open to examination by the major taxing jurisdictions to which the Company is subject. The Company is not currently under audit in any major taxing jurisdiction.

X
- 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 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph h -Article 4 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration