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Taxes | 12 Months Ended
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Mar. 31, 2012
Taxes | 13. Taxes MKHL is incorporated in the British Virgin Islands and is generally not subject to taxation. MKHL’s subsidiaries are subject to taxation in the United States and various other foreign jurisdictions which are aggregated in the “Non-U.S,” information captioned below. Income (loss) before provision for income taxes consisted of the following (in thousands):
|  | Fiscal Years Ended |
|  | March 31, 2012 |  |  | April 2, 2011 |  |  | April 3, 2010 |
United States |  | $ | 227,514 |  |  | $ | 134,197 |  |  | $ | 48,300 |
Non-U.S. |  |  | 21,302 |  |  |  | (978 | ) |  |  | 6,647 |
Total income before provision for income taxes |  | $ | 248,816 |  |  | $ | 133,219 |  |  | $ | 54,947 |
The provision for income taxes was as follows (in thousands):
|  | Fiscal Years Ended |
|  | March 31, 2012 |  |  | April 2, 2011 |  |  | April 3, 2010 |
Current |  |  |  |  |  |  |  |  |  |  |  |
U.S. Federal |  | $ | 79,690 |  |  | $ | 30,494 |  |  | $ | 552 |
U.S. State |  |  | 20,916 |  |  |  | 11,527 |  |  |  | 1,976 |
Non-U.S. |  |  | 8,575 |  |  |  | 6,249 |  |  |  | 2,146 |
Total current |  |  | 109,181 |  |  |  | 48,270 |  |  |  | 4,674 |
Deferred |  |  |  |  |  |  |  |  |  |  |  |
U.S. Federal |  |  | (4,128 | ) |  |  | 9,950 |  |  |  | 8,203 |
U.S. State |  |  | (3,595 | ) |  |  | 2,057 |  |  |  | 3,718 |
Non-U.S. |  |  | (6 | ) |  |  | 436 |  |  |  | (896 | )
Total deferred |  |  | (7,729 | ) |  |  | 12,443 |  |  |  | 11,025 |
Total provision for income taxes |  | $ | 101,452 |  |  | $ | 60,713 |  |  | $ | 15,699 |
The following table summarizes the significant differences between the United States Federal statutory tax rate and the Company’s effective tax rate for financial statement purposes:
|  | Fiscal Years Ended |
|  | March 31, 2012 |  |  | April 2, 2011 |  |  | April 3, 2010 |
Federal tax at 35% statutory rate |  |  | 35.0 | % |  |  | 35.0 | % |  |  | 35.0 | %
State and local income taxes, net of federal benefit |  |  | 4.8 | % |  |  | 7.1 | % |  |  | 10.6 | %
Differences in tax effects on foreign income |  |  | -1.3 | % |  |  | 1.9 | % |  |  | -1.7 | %
Foreign tax credit |  |  | -0.6 | % |  |  | -1.1 | % |  |  | 0.0 | %
Reserve for potential witholding requirements (1) |  |  | 0.0 | % |  |  | 0.1 | % |  |  | -15.2 | %
Liability for uncertain tax positions |  |  | 0.2 | % |  |  | 0.3 | % |  |  | 0.5 | %
Effect of changes in valuation allowances on deferred tax assets |  |  | 1.8 | % |  |  | 2.5 | % |  |  | -1.4 | %
Other |  |  | 0.9 | % |  |  | -0.2 | % |  |  | 0.8 | %
|  |  | 40.8 | % |  |  | 45.6 | % |  |  | 28.6 | %
| (1) | During Fiscal 2010, as a result of the reorganization of certain of the Company’s international operations, certain withholding tax requirements were eliminated and the related deferred tax liability previously required to be recognized of approximately $8.4 million was reversed.
Significant components of the Company’s deferred tax assets (liabilities) consist of the following (in thousands):
|  | March 31, 2012 |  |  | April 2, 2011 |
Deferred tax assets |  |  |  |  |  |  |  |
Inventories |  | $ | 5,185 |  |  | $ | 4,683 |
Payroll related accruals |  |  | 1,123 |  |  |  | 239 |
Deferred rent |  |  | 11,677 |  |  |  | 8,304 |
Net operating loss carryforwards |  |  | 8,142 |  |  |  | 4,460 |
Stock compensation |  |  | 7,777 |  |  |  | — |
Deferred revenue |  |  | 3,993 |  |  |  | 2,096 |
Other |  |  | 1,464 |  |  |  | 794 |
|  |  | 39,361 |  |  |  | 20,576 |
Valuation allowance |  |  | (8,233 | ) |  |  | (4,387 | )
Total deferred tax assets |  |  | 31,128 |  |  |  | 16,189 |
Deferred tax liabilities |  |  |  |  |  |  |  |
Goodwill and intangibles |  |  | (1,222 | ) |  |  | (1,380 | )
Depreciation |  |  | (20,801 | ) |  |  | (10,602 | )
Other |  |  | (308 | ) |  |  | (429 | )
Total deferred tax liabilities |  |  | (22,331 | ) |  |  | (12,411 | )
Net deferred tax assets |  | $ | 8,797 |  |  | $ | 3,778 |
The Company maintains valuation allowances on deferred tax assets applicable to subsidiaries in jurisdictions for which separate income tax returns are filed where realization of the related deferred tax assets from future profitable operations is not reasonably assured. Deferred tax valuation allowances were increased by approximately $4.4 million in Fiscal 2012, $3.3 million in Fiscal 2011, and $0.8 million in Fiscal 2010. As a result of the attainment and expectation of achieving profitable operations in certain countries comprising the Company’s European operations and certain state jurisdictions in the United States, for which deferred tax valuation allowances had been previously established, the Company released valuation allowances amounting to approximately $0.2 million in Fiscal 2012 and $0.9 million in Fiscal 2011. The above amounts exclude the effect of currency translation adjustments. The Company has U.S. state and non-U.S. net operating loss carryforwards of approximately $2.9 million and $43.7 million, respectively, that will begin to expire in 2026 and 2016, respectively. As of March 31, 2012, the Company has accrued a liability of approximately $1.9 million related to uncertain tax positions, which includes accrued interest, which is included in other long-term liabilities in the consolidated balance sheets. The total amount of unrecognized tax benefits that, if recognized, would impact the effective tax rate was approximately $1.8 million at March 31, 2012, and approximately $0.9 million at April 2, 2011. A reconciliation of the beginning and ending amounts of unrecognized tax benefits, excluding accrued interest, for Fiscal 2012 and Fiscal 2011, are presented below (in thousands):
|  | March 31, 2012 |  |  | April 2, 2011 |
Unrecognized tax benefits beginning balance |  | $ | 939 |  |  | $ | 378 |
Additions related to prior period tax positions |  |  | 246 |  |  |  | — |
Additions related to current period tax positions |  |  | 573 |  |  |  | 675 |
Decreases from prior period positions |  |  | — |  |  |  | (114 | )
Unrecognized tax benefits ending balance |  | $ | 1,758 |  |  | $ | 939 |
The Company classifies interest and penalties related to unrecognized tax benefits as components of the provision for income taxes. Interest recognized through the consolidated statements of operations for Fiscal 2012 and Fiscal 2011 was approximately $0.1 million and $0.1 million, respectively. The total amount of unrecognized tax benefits relating to the Company’s tax positions is subject to change based on future events, including, but not limited to, the settlements of ongoing audits and/or the expiration of applicable statutes of limitations. The Company files income tax returns in the United States, for federal, state, and local purposes, and in certain foreign jurisdictions. With few exceptions, the Company is no longer subject to examinations by the relevant tax authorities for years prior to its fiscal year ended March 31, 2008. The total amount of undistributed earnings of United States and other non-U.S. subsidiaries as of March 31, 2012 was approximately $274.3 million. It is the Company’s intention to permanently reinvest undistributed earnings of its United States and non-U.S. subsidiaries and thereby indefinitely postpone their remittance. Accordingly, no provision has been made for withholding taxes or income taxes which may become payable if undistributed earnings are paid as dividends.

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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 Statement of Financial Accounting Standard (FAS) -Number 109 -Paragraph 136, 172 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. 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=6881521&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 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 109 -Paragraph 43, 44, 45, 46, 47, 48, 49 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 6: 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 7: 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 8: 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
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