XML 83 R19.htm IDEA: XBRL DOCUMENT
v3.2.0.727

Income Taxes | 12 Months Ended
--- | ---
Jun. 27, 2015
Income Tax Disclosure [Abstract] |
Income Taxes |
12. | Income Taxes
Income before provision for income taxes for fiscal 2015, 2014, and 2013 consisted of the following (in millions):
|  | 2015 |  |  | 2014 |  |  | 2013 |
United States |  | $ | 13.4 |  |  | $ | 76.7 |  |  | $ | 44.0 |
Foreign |  |  | 146.8 |  |  |  | (2.2 | ) |  |  | 57.7 |
Income before provision for income taxes |  | $ | 160.2 |  |  | $ | 74.5 |  |  | $ | 101.7 |
The provision for income taxes for fiscal 2015, 2014, and 2013 consisted of the following (in millions):
|  | 2015 |  |  | 2014 |  |  | 2013 |
Current tax expense (benefit) |  |  |  |  |  |  |  |  |  |  |  |
Federal |  | $ | 12.0 |  |  | $ | (3.3 | ) |  | $ | (9.2 | )
Foreign |  |  | 63.0 |  |  |  | 12.3 |  |  |  | 10.5 |
|  |  | 75.0 |  |  |  | 9.0 |  |  |  | 1.3 |
Deferred tax expense (benefit) |  |  |  |  |  |  |  |  |  |  |  |
Federal |  |  | (3.7 | ) |  |  | 18.7 |  |  |  | 1.9 |
Foreign |  |  | (21.5 | ) |  |  | 0.1 |  |  |  | (0.4 | )
|  |  | (25.2 | ) |  |  | 18.8 |  |  |  | 1.5 |
Provision for income taxes |  | $ | 49.8 |  |  | $ | 27.8 |  |  | $ | 2.8 |
The provision for income taxes differs from the federal statutory rate for fiscal 2015, 2014, and 2013 as follows (in millions):
|  | 2015 |  |  | 2014 |  |  | 2013 |
Provision at U.S. federal statutory rate |  | $ | 56.1 |  |  | $ | 26.1 |  |  | $ | 35.6 |
Qualified stock options |  |  | 2.7 |  |  |  | 0.9 |  |  |  | 2.1 |
Business credits |  |  | (4.7 | ) |  |  | (2.8 | ) |  |  | (3.7 | )
Foreign tax differential |  |  | (4.3 | ) |  |  | (19.6 | ) |  |  | (16.6 | )
Remeasurement of unrecognized tax benefits |  |  | (0.1 | ) |  |  | — |  |  |  | (15.6 | )
Non-deductible portion of contingent consideration |  |  | (4.7 | ) |  |  | 21.2 |  |  |  | — |
Change in valuation allowance |  |  | (0.5 | ) |  |  | (0.3 | ) |  |  | (0.2 | )
Nondeductible amortization |  |  | 2.7 |  |  |  | 0.9 |  |  |  | 0.6 |
Other differences |  |  | 2.6 |  |  |  | 1.4 |  |  |  | 0.6 |
Provision for income taxes |  | $ | 49.8 |  |  | $ | 27.8 |  |  | $ | 2.8 |
Net deferred tax assets as of the end of fiscal 2015 and 2014 consisted of the following (in millions):
|  | 2015 |  |  | 2014 |
Current deferred tax assets |  | $ | 17.6 |  |  | $ | 7.2 |
Non-current deferred tax assets/(liabilities) |  |  | (33.0 | ) |  |  | 5.1 |
Net deferred tax assets/(liabilities) |  | $ | (15.4 | ) |  | $ | 12.3 |
Current deferred tax assets, non-current deferred tax assets, and non-current deferred tax liabilities are included in prepaid expenses and other current assets, other assets, and other liabilities, respectively, in the accompanying consolidated balance sheets. Significant components of our deferred tax assets (liabilities) as of the end of fiscal 2015 and 2014 consisted of the following (in millions):
|  | 2015 |  |  | 2014 |
Deferred tax assets: |  |  |  |  |  |  |  |
Investment writedowns |  | $ | 5.8 |  |  | $ | 6.3 |
Inventory writedowns |  |  | 6.8 |  |  |  | 0.3 |
Property and equipment |  |  | 1.3 |  |  |  | 2.3 |
Accrued compensation |  |  | 3.3 |  |  |  | 2.5 |
Deferred compensation |  |  | 2.8 |  |  |  | 4.6 |
Share-based compensation |  |  | 8.8 |  |  |  | 9.3 |
Business credit carryforward |  |  | 10.7 |  |  |  | 18.1 |
Net operating loss carryforward |  |  | 5.7 |  |  |  | 8.7 |
Other accruals |  |  | 4.3 |  |  |  | 0.7 |
|  |  | 49.5 |  |  |  | 52.8 |
Valuation allowance |  |  | (14.5 | ) |  |  | (14.8 | )
|  |  | 35.0 |  |  |  | 38.0 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Acquisition intangibles |  |  | (43.7 | ) |  |  | (18.1 | )
Interest |  |  | (6.7 | ) |  |  | (7.6 | )
|  |  | (50.4 | ) |  |  | (25.7 | )
Net deferred tax assets/(liabilities) |  | $ | (15.4 | ) |  | $ | 12.3 |
Realization of deferred tax assets depends on our generating sufficient U.S. and certain foreign taxable income in future years to obtain a benefit from the utilization of those deferred tax assets on our tax returns. Accordingly, the amount of deferred tax assets considered realizable may increase or decrease when we reevaluate the underlying basis for our estimates of future U.S. and foreign taxable income. As of the end of fiscal 2015, a valuation allowance of $14.5 million had been established to reduce deferred tax assets to levels that we believe are more likely than not to be realized through future taxable income. The net change in the valuation allowance during fiscal 2015 was a decrease of $0.3 million. Undistributed operating earnings of our foreign subsidiaries were approximately $713.0 million as of the end of fiscal 2015 and are considered to be indefinitely reinvested overseas; accordingly, no U.S. income taxes have been provided for these earnings. The potential deferred tax liability associated with undistributed operating earnings of our foreign subsidiaries was approximately $116.0 million as of the end of fiscal 2015. As of the end of fiscal 2015, we had federal and California net operating loss carryforwards of approximately $25.7 million and $33.2 million, respectively. The federal net operating loss carryforwards, which begin to expire in fiscal 2022 if not utilized, were acquired and are subject to limitations on their utilization. Tax benefit of $9.3 million from the federal net operating loss carryforwards will be recorded to additional paid-in capital when realized. The California net operating loss will begin to expire in fiscal 2012, if not utilized. All of the California net operating loss carryforwards were attributable to share-based award deductions and any benefit of these net operating losses will be recorded directly to additional paid-in capital when realized. The federal and state capital loss carryforwards will begin to expire in fiscal 2017, if not utilized. Under current tax law, net operating loss and tax credit carryforwards available to offset future income or income taxes may be limited by statute or upon the occurrence of certain events, including significant changes in ownership. We had $18.3 million and $21.6 million of federal and state research tax credit carryforwards, respectively, as of the end of fiscal 2015. The benefit of $23.6 million of these credits will be recorded directly to additional paid-in capital when realized. The federal research tax credit carryforward will begin to expire in 2032 and the state research tax credit can be carried forward indefinitely. We also had $1.6 million of federal alternative minimum tax credit carryforward available to offset future federal tax liabilities with no expiration, which will be recorded directly to additional paid-in capital when realized. The total liability for gross unrecognized tax benefits related to uncertain tax positions, included in other liabilities in our consolidated balance sheets, increased by $1.4 million to $11.6 million in fiscal 2015 from $10.2 million in fiscal 2014. This total amount would reduce the effective tax rate on income from continuing operations, if recognized. A reconciliation of the beginning and ending balance of gross unrecognized tax benefits for fiscal 2015, 2014, and 2013 consisted of the following (in millions):
|  | 2015 |  |  | 2014 |  |  | 2013 |
Beginning balance |  | $ | 10.2 |  |  | $ | 8.2 |  |  | $ | 23.1 |
Increase in unrecognized tax benefits related to current year tax positions |  |  | 2.3 |  |  |  | 1.1 |  |  |  | 1.8 |
Increase in unrecognized tax benefits related to prior year tax positions |  |  | 0.3 |  |  |  | 1.7 |  |  |  | — |
Remeasurement for results of income tax examination |  |  | — |  |  |  | — |  |  |  | (15.0 | )
Decrease due to statute expiration |  |  | (1.2 | ) |  |  | (0.8 | ) |  |  | (1.7 | )
Ending Balance |  | $ | 11.6 |  |  | $ | 10.2 |  |  | $ | 8.2 |
Accrued interest and penalties increased by $0.2 million, decreased by less than $0.1 million, and decreased by $1.5 million representing income tax expense or benefit, in fiscal 2015, 2014, and 2013, respectively. Accrued interest and penalties was $1.1 million and $0.9 million as of June 30, 2015 and 2014, respectively. Our policy is to classify interest and penalties, if any, as components of income tax expense. In May 2011, we were notified by the Internal Revenue Service, or the Service, that our fiscal 2003 through 2006 and fiscal 2008 through 2010 returns would be subject to examination. In May 2015, we received the Revenue Agent’s Report concluding this audit without any tax adjustment. Our case, reviewed by the Joint Committee on Taxation, was concluded in the fourth quarter of fiscal 2015. The Tax Increase Prevention Act, or the Act, which retroactively extended the federal research tax credit from January 1, 2014 through December 31, 2014, was enacted on December 19, 2014. As such, we recognized six months of tax benefit from the federal research tax credit related to fiscal 2014 and another six months of federal research tax credit in the second quarter of fiscal 2015. It is reasonably possible that the amount of liability for unrecognized tax benefits may change within the next 12 months and an estimate of the range of possible changes could result in a decrease of $1.3 million up to an increase of $2.2 million. On March 31, 2015, Japan’s parliament approved legislation to reduce corporate income tax rates by 3.29 percentage points over the next two years. As a result, the current combined national and local effective tax rate of 35.6% will be reduced to 32.3% over the next two years. We have accounted for the impact of the tax rate change in the fourth quarter of our fiscal 2015. In Altera Corporation v. Commissioner, the U.S. Tax Court invalidated a section of the Treasury Regulation that requires taxpayers to include stock compensation expense under a cost sharing agreement with related parties, whether or not using the grant date or exercise method to determine the value of stock options. We are currently reviewing the impact of this court decision. Our major tax jurisdictions are the United States, Hong Kong SAR, and Japan. From fiscal 2011 onward, we remain subject to examination by one or more of these jurisdictions.

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 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 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph h -Article 4 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration