v3.3.0.814

Income Taxes | 12 Months Ended
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Oct. 03, 2015
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes The domestic and foreign components of income (loss) before income tax expense for fiscal 2015, 2014 and 2013 were as follows (in thousands):
|  | 2015 |  | 2014 |  | 2013
U.S. |  | $ | (32,480 | ) |  | $ | (12,473 | ) |  | $ | (8,406 | )
Foreign |  | 138,775 |  |  | 105,798 |  |  | 93,389 |
|  | $ | 106,295 |  |  | $ | 93,325 |  |  | $ | 84,983 |
Income tax expense (benefit) for fiscal 2015, 2014 and 2013 were as follows (in thousands):
|  | 2015 |  | 2014 |  | 2013
Current: |  |  |  |  |  |
Federal |  | $ | — |  |  | $ | (2,050 | ) |  | $ | 408 |
State |  | (397 | ) |  | (332 | ) |  | — |
Foreign |  | 12,957 |  |  | 10,147 |  |  | 4,089 |
|  | 12,560 |  |  | 7,765 |  |  | 4,497 |
Deferred: |  |  |  |  |  |
Federal |  | — |  |  | (1,506 | ) |  | (3,702 | )
State |  | (399 | ) |  | — |  |  | (42 | )
Foreign |  | (198 | ) |  | (147 | ) |  | 1,971 |
|  | (597 | ) |  | (1,653 | ) |  | (1,773 | )
|  | $ | 11,963 |  |  | $ | 6,112 |  |  | $ | 2,724 |
The following is a reconciliation of the federal statutory income tax rate to the effective income tax rates reflected in the Consolidated Statements of Comprehensive Income for fiscal 2015, 2014 and 2013:
|  | 2015 |  | 2014 |  | 2013
Federal statutory income tax rate |  | 35.0 | % |  | 35.0 | % |  | 35.0 | %
Increase (decrease) resulting from: |  |  |  |  |  |
Permanent differences |  | 1.3 |  |  | 1.8 |  |  | (0.1 | )
Foreign tax rate differences |  | (38.0 | ) |  | (33.2 | ) |  | (34.4 | )
Valuation allowances |  | 16.5 |  |  | 8.4 |  |  | 5.8 |
Other, net |  | (3.5 | ) |  | (5.5 | ) |  | (3.1 | )
Effective income tax rate |  | 11.3 | % |  | 6.5 | % |  | 3.2 | %
The Company recorded income tax expense of $12.0 million, $6.1 million and $2.7 million for fiscal 2015, 2014 and 2013, respectively. The effective tax rate for fiscal 2015 is higher than that of fiscal 2014 primarily as a result of the geographic distribution of worldwide earnings and tax benefits recorded in fiscal 2014 due to the lapse of statute of limitations related to certain U.S. tax examinations. The effective tax rate for fiscal 2014 was higher than that of fiscal 2013 primarily as a result of geographic distribution of worldwide earnings. During fiscal 2015, the Company recorded a $17.5 million addition to its valuation allowance relating to continuing losses in certain jurisdictions within the AMER and EMEA regions. As of October 3, 2015, using the measurement criteria found in ASC 740, the Company believes that the positive evidence does not outweigh the negative and the valuation allowance should remain in place. During fiscal 2014, the Company recorded a $7.9 million addition to its valuation allowance related to continuing losses in certain jurisdictions within the AMER and EMEA regions. During fiscal 2014, the Company also recorded tax benefits of $3.8 million primarily due to the lapse of statute of limitations related to certain U.S. tax examinations during the fiscal year. During fiscal 2013, the Company recorded a $7.0 million addition to its valuation allowance, of which $5.2 million related to continuing losses in certain jurisdictions within the AMER and EMEA regions. During fiscal 2013, the Company performed an analysis of all available evidence, both positive and negative, regarding the need for a valuation allowance against its U.K. deferred tax assets, consistent with the provisions of ASC 740. Accordingly, the Company established an additional $1.8 million valuation allowance against the U.K. deferred tax assets. During fiscal 2013 the Company also identified and recorded several out-of-period tax errors that reduced tax expense by $3.2 million. The Company believes these out-of-period tax errors were not material to the fiscal 2013, or previously issued, financial statements. The components of the net deferred income tax assets as of October 3, 2015 and September 27, 2014, were as follows (in thousands):
|  | 2015 |  | 2014
Deferred income tax assets: |  |  |  |
Loss/credit carryforwards |  | $ | 39,380 |  |  | $ | 17,356 |
Goodwill |  | 49 |  |  | 541 |
Inventories |  | 7,799 |  |  | 5,468 |
Accrued benefits |  | 25,180 |  |  | 23,754 |
Allowance for bad debts |  | 321 |  |  | 343 |
Other |  | 3,675 |  |  | 3,165 |
Total gross deferred income tax assets |  | 76,404 |  |  | 50,627 |
Less valuation allowances |  | (58,343 | ) |  | (41,935 | )
Deferred income tax assets |  | 18,061 |  |  | 8,692 |
Deferred income tax liabilities: |  |  |  |
Property, plant and equipment |  | 13,320 |  |  | 4,322 |
Other |  | 84 |  |  | 84 |
Deferred income tax liabilities |  | 13,404 |  |  | 4,406 |
Net deferred income tax assets |  | $ | 4,657 |  |  | $ | 4,286 |
During fiscal 2015, the Company’s valuation allowance increased by $16.4 million. This increase is the result of increases to the valuation allowances against the net deferred tax assets in the AMER region of $14.4 million and in the EMEA region of $2.0 million. As of October 3, 2015, the Company had approximately $118.3 million of pre-tax state net operating loss carryforwards that expire between fiscal 2016 and 2036. These state net operating losses have a full valuation allowance against them. As a result of using the with-and-without method under the requirements for accounting for stock-based compensation, the Company has an unrecognized net operating loss carryforward of $4.8 million related to tax deductions in excess of compensation expense for stock options. This deduction will remain unrecognized until such time as the related deductions actually reduce income taxes payable. During the fiscal year ended October 3, 2015, tax legislation was adopted in various jurisdictions. None of these changes are expected to have a material impact on the Company's consolidated financial condition, results of operations or cash flows. The Company has been granted a tax holiday for a foreign subsidiary in the APAC region. This tax holiday will expire on December 31, 2024, and is subject to certain conditions with which the Company expects to comply. The Company benefited from a second tax holiday within the APAC region, which under the terms of the Company's agreement with the local taxing authority expired on December 31, 2013. During fiscal 2015, 2014 and 2013, these tax holidays resulted in tax reductions of approximately $29.9 million ($0.89 per basic share), $24.1 million ($0.71 per basic share) and $22.7 million ($0.66 per basic share), respectively. The Company does not provide for taxes that would be payable if undistributed earnings of foreign subsidiaries were remitted because the Company considers these earnings to be permanently reinvested. The aggregate undistributed earnings of the Company’s foreign subsidiaries for which a deferred income tax liability has not been recorded was approximately $825.7 million as of October 3, 2015. If such earnings were repatriated, additional tax expense may result, although the calculation of such additional taxes is not practicable at this time. The Company has approximately $2.4 million of uncertain tax benefits as of October 3, 2015. The Company has classified these amounts in the Consolidated Balance Sheets as “Other liabilities” (noncurrent) in the amount of $0.6 million and an offset to “Deferred income tax” (noncurrent asset) in the amount of $1.8 million. The Company has classified these amounts as “Other liabilities” (noncurrent) and “Deferred income taxes” (noncurrent asset) to the extent that payment is not anticipated within one year. The following is a reconciliation of the beginning and ending amounts of unrecognized income tax benefits (in thousands):
Balance at September 28, 2013 | $ | 7,436 |
Gross increases for tax positions of prior years | 324 |
Gross increases for tax positions of the current year | — |
Gross decreases for tax positions of prior years | 1,582 |
Lapse of applicable statute of limitations | 3,810 |
Settlements | — |
Balance at September 27, 2014 | $ | 2,368 |
Gross increases for tax positions of prior years | 73 |
Gross increases for tax positions of the current year | — |
Gross decreases for tax positions of prior years | 88 |
Lapse of applicable statute of limitations | — |
Settlements | — |
Balance at October 3, 2015 | $ | 2,353 |
Approximately $0.6 million and $1.1 million of the balance as of October 3, 2015 and September 27, 2014, respectively, would reduce the Company’s effective tax rate if recognized. The Company recognizes accrued interest and penalties related to unrecognized tax benefits in income tax expense. The total accrued penalties and net accrued interest with respect to income taxes was approximately $0.2 million, $0.2 million, and $1.1 million as of October 3, 2015, September 27, 2014 and September 28, 2013, respectively. The Company recognized $0.1 million of expense for accrued penalties and net accrued interest in the Consolidated Statements of Comprehensive Income for the fiscal year ended October 3, 2015. It is possible that a number of uncertain tax positions related to federal and state tax positions may be settled within the next 12 months. Settlement of these matters is not expected to have a material effect on the Company’s consolidated results of operations, financial position and cash flows. The Company is not currently under examination by taxing authorities in the U.S. or foreign jurisdictions in which the Company operates. The Company is not aware of any material proposed adjustment that has not been reflected in the current financial statements. The Company files income tax returns, including returns for its subsidiaries, with federal, state, local and foreign taxing jurisdictions. The following tax years remain subject to examination by the respective major tax jurisdictions:
Jurisdiction |  | Fiscal Years
China |  | 2010-2015
Germany |  | 2010-2015
Mexico |  | 2010-2015
Romania |  | 2010-2015
United Kingdom |  | 2011-2015
United States |  |
Federal |  | 2011-2015
State |  | 2003-2015

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- 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 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 2: 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 Reference 3: 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 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 + Details
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