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Taxes | 12 Months Ended
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Mar. 29, 2014
Taxes | 14. 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 before provision for income taxes consisted of the following (in thousands):
|  | Fiscal Years Ended |
|  | March 29, 2014 |  |  | March 30, 2013 |  |  | March 31, 2012 |
United States |  | $ | 792,899 |  |  | $ | 538,607 |  |  | $ | 227,514 |
Non-U.S. |  |  | 214,748 |  |  |  | 88,520 |  |  |  | 21,302 |
Total income before provision for income taxes |  | $ | 1,007,647 |  |  | $ | 627,127 |  |  | $ | 248,816 |
The provision for income taxes was as follows (in thousands):
|  | Fiscal Years Ended |
|  | March 29, 2014 |  |  | March 30, 2013 |  |  | March 31, 2012 |
Current |  |  |  |  |  |  |  |  |  |  |  |
U.S. Federal |  | $ | 295,159 |  |  | $ | 179,014 |  |  | $ | 79,690 |
U.S. State |  |  | 50,348 |  |  |  | 32,249 |  |  |  | 20,916 |
Non-U.S. |  |  | 30,560 |  |  |  | 15,040 |  |  |  | 8,575 |
Total current |  |  | 376,067 |  |  |  | 226,303 |  |  |  | 109,181 |
Deferred |  |  |  |  |  |  |  |  |  |  |  |
U.S. Federal |  |  | (24,847 | ) |  |  | 1,246 |  |  |  | (4,128 | )
U.S. State |  |  | (3,594 | ) |  |  | 2,088 |  |  |  | (3,595 | )
Non-U.S. |  |  | (1,464 | ) |  |  | (112 | ) |  |  | (6 | )
Total deferred |  |  | (29,905 | ) |  |  | 3,222 |  |  |  | (7,729 | )
Total provision for income taxes |  | $ | 346,162 |  |  | $ | 229,525 |  |  | $ | 101,452 |
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 29, 2014 |  |  | March 30, 2013 |  |  | March 31, 2012 |
Federal tax at 35% statutory rate |  |  | 35.0 | % |  |  | 35.0 | % |  |  | 35.0 | %
State and local income taxes, net of federal benefit |  |  | 2.3 | % |  |  | 3.6 | % |  |  | 4.8 | %
Differences in tax effects on foreign income |  |  | -3.9 | % |  |  | -3.1 | % |  |  | -1.3 | %
Foreign tax credit |  |  | -0.2 | % |  |  | -0.2 | % |  |  | -0.6 | %
Liability for uncertain tax positions |  |  | 0.8 | % |  |  | 0.5 | % |  |  | 0.2 | %
Effect of changes in valuation allowances on deferred tax assets |  |  | -0.2 | % |  |  | 0.3 | % |  |  | 1.8 | %
Other |  |  | 0.6 | % |  |  | 0.5 | % |  |  | 0.9 | %
|  |  | 34.4 | % |  |  | 36.6 | % |  |  | 40.8 | %
Significant components of the Company’s deferred tax assets (liabilities) consist of the following (in thousands):
|  | March 29, 2014 |  |  | March 30, 2013 |
Deferred tax assets |  |  |  |  |  |  |  |
Inventories |  | $ | 11,380 |  |  | $ | 8,469 |
Payroll related accruals |  |  | 4,722 |  |  |  | 1,188 |
Deferred rent |  |  | 24,281 |  |  |  | 16,209 |
Deferred Revenue |  |  | 2,389 |  |  |  | — |
Net operating loss carryforwards |  |  | 7,743 |  |  |  | 8,508 |
Stock compensation |  |  | 14,117 |  |  |  | 8,909 |
Sales allowances |  |  | 7,654 |  |  |  | — |
Other |  |  | 9,589 |  |  |  | 2,331 |
|  |  | 81,875 |  |  |  | 45,614 |
Valuation allowance |  |  | (8,020 | ) |  |  | (8,746 | )
Total deferred tax assets |  |  | 73,855 |  |  |  | 36,868 |
Deferred tax liabilities |  |  |  |  |  |  |  |
Goodwill and intangibles |  |  | (24,324 | ) |  |  | (14,780 | )
Depreciation |  |  | (20,691 | ) |  |  | (20,927 | )
Other |  |  | (526 | ) |  |  | (1,455 | )
Total deferred tax liabilities |  |  | (45,541 | ) |  |  | (37,162 | )
Net deferred tax (liability) assets |  | $ | 28,314 |  |  | $ | (294 | )
The Company maintains valuation allowances on deferred tax assets applicable to subsidiaries in jurisdictions for which separate income tax returns are filed and where realization of the related deferred tax assets from future profitable operations is not reasonably assured. Deferred tax valuation allowances were increased by approximately $0.9 million in Fiscal 2014, $1.6 million in Fiscal 2013, and $4.4 million in Fiscal 2012. 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 $1.6 million in Fiscal 2014, $1.1 million in Fiscal 2013, and $0.2 million in Fiscal 2012. The Company has non-U.S. net operating loss carryforwards of approximately $27.4 million that will begin to expire in 2017. As of March 29, 2014, the Company has accrued a liability of approximately $19.0 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 $18.1 million at March 29, 2014, approximately $6.6 million at March 30, 2013, and approximately $1.8 million at March 31, 2012. A reconciliation of the beginning and ending amounts of unrecognized tax benefits, excluding accrued interest, for Fiscal 2014, Fiscal 2013, and Fiscal 2012, are presented below (in thousands):
|  | March 29, 2014 |  |  | March 30, 2013 |  |  | March 31, 2012 |
Unrecognized tax benefits beginning balance |  | $ | 6,628 |  |  | $ | 1,758 |  |  | $ | 939 |
Additions related to prior period tax positions |  |  | 2,515 |  |  |  | 3,318 |  |  |  | 246 |
Additions related to current period tax positions |  |  | 9,312 |  |  |  | 2,482 |  |  |  | 573 |
Decreases from prior period positions |  |  | (368 | ) |  |  | (930 | ) |  |  | — |
Unrecognized tax benefits ending balance |  | $ | 18,087 |  |  | $ | 6,628 |  |  | $ | 1,758 |
The Company classifies interest expense and penalties related to unrecognized tax benefits as components of the provision for income taxes. Interest expense recognized in the consolidated statements of operations for Fiscal 2014, Fiscal 2013, and Fiscal 2012 was approximately $0.9 million, $0.3 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 April 3, 2010. The total amount of undistributed earnings of United States and other non-U.S. subsidiaries as of March 29, 2014 was approximately $1,317.0 million. With the exception of one of the Company’s non-U.S. subsidiaries, it is the Company’s intention to permanently reinvest undistributed earnings of the remainder of its United States and non-U.S. subsidiaries and thereby indefinitely postpone their remittance. Deferred taxes are not provided on undistributed earnings of those subsidiaries that are indefinitely reinvested, and as such, no provision has been made for withholding taxes or income taxes for those subsidiaries. For the non-U.S. subsidiary whose earnings the Company does not intend to permanently reinvest, a deferred tax liability related to its undistributed earnings has been established, reflecting the potential future income tax liability upon distribution. For the remainder of the Company’s undistributed earnings not currently provided for, income taxes may become payable if undistributed earnings of those subsidiaries are paid as dividends, and as such, deferred liabilities would be recognized upon contemplation of the distribution of those earnings.

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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 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
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