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INCOME TAXES | 9 Months Ended
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Jun. 30, 2018
Income Tax Disclosure [Abstract] |
INCOME TAXES | INCOME TAXES The following table reflects the provision for income taxes and the effective tax rate for the three and nine months ended June 30, 2018 and July 1, 2017:
| Three months ended |  | Nine months ended
(dollar amounts in thousands) | June 30, 2018 |  | July 1, 2017 As Restated |  | June 30, 2018 |  | July 1, 2017 As Restated
Income tax expense/(benefit) | 7,282 |  |  | (17,657 | ) |  | 122,494 |  |  | (9,933 | )
Effective tax rate | 10.8 | % |  | (102.9 | )% |  | 81.9 | % |  | (13.3 | )%
For the nine months ended June 30, 2018, the effective income tax rate differed from the federal statutory tax rate primarily due to tax expense related to the enactment of the Tax Cuts and Jobs Act (the “Act”), foreign withholding taxes, and tax liabilities from foreign operations, partially offset by tax benefits from profits generated in foreign operations subject to a lower statutory tax rate than the federal rate, the impact of tax holidays, tax benefits from domestic research expenditures, and foreign tax credit. For the nine months ended July 1, 2017, the effective income tax rate differed from the federal statutory tax rate primarily due to tax benefits from electing to claim foreign tax credit, profits generated in foreign operations subject to a lower statutory tax rate than the federal rate, domestic research tax credit, and the impact of tax holiday, partially offset by an increase for deferred taxes on unremitted earnings, foreign withholding taxes, and tax liabilities from foreign operations. The increase in tax expense for the three months ended June 30, 2018 to $7.3 million from the tax benefit for the three months ended July 1, 2017 of $(17.7) million was primarily due to a discrete tax benefit from electing to claim foreign tax credit reflected in fiscal 2017 and higher quarter-to-date profitability, offset by decrease in the federal statutory tax rate. The increase in tax expense for the nine months ended June 30, 2018 to $122.5 million from the tax benefit for the nine months ended July 1, 2017 of $(9.9) million, of which $105.7 million was due to the enactment of the Act and the remaining amount was primarily due to a discrete tax benefit from electing to claim foreign tax credit reflected in fiscal 2017 and higher year-to-date profitability, partially offset by a decrease in the federal statutory tax rate. The Company's future effective tax rate would be affected by the enactment of the Act, by decrease in earnings in countries where it has lower statutory rates or increase in earnings in countries where it has higher statutory rates, by changes in the valuation of its deferred tax assets and liabilities, or by changes in tax laws, regulations, accounting principles, or interpretations thereof. It is reasonably possible that the amount of the unrecognized tax benefit with respect to certain unrecognized tax positions will increase or decrease during the next 12 months due to the expected lapse of statutes of limitation and / or settlements of tax examinations. The Company recently completed an income tax examination by the Internal Revenue Service which resulted in an insignificant impact to the financial statements. The Company is under income tax examination by tax authorities in certain foreign jurisdictions. In the first quarter of fiscal 2018, excess tax benefits from stock based compensation of $5.4 million, previously offset against deferred tax assets, were reflected in the consolidated balance sheets as a component of retained earnings as a result of the adoption of ASU 2016-09. Please refer to Note 12 for more details regarding the adoption of ASU 2016-09. 2017 Tax Cuts and Jobs Act On December 22, 2017, the Tax Cuts and Jobs Act (the “Act”) was signed into legislation. The Act, among other changes, reduces the U.S. federal corporate tax rate from 35% to 21%, implements a modified territorial tax system that includes a one-time transition tax on deemed repatriation of previously untaxed accumulated earnings and profits of certain foreign subsidiaries, and creates new taxes on certain foreign-sourced earnings. At December 30, 2017, the Company has reflected the income tax effects of the Act for which the accounting under Accounting Standards Codification Topic 740, Income Taxes is complete. For those items for which the accounting is not yet complete, but for which a reasonable estimate could be made, we have recorded the provisional tax expense in the Statement of Operations. As described below, we have made a reasonable estimate of the effects on our existing deferred tax balances and the one-time transition tax. We recognized an aggregate net discrete tax provision of $105.7 million, comprised primarily of approximately $2.6 million from the re-measurement of U.S. deferred tax assets and liabilities using the relevant tax rate at which we expect them to reverse in the future and approximately $103.2 million from the one-time transition tax on deemed repatriation of previously untaxed accumulated earnings and profits of certain foreign subsidiaries, net of deemed taxes paid. For the period ended June 30, 2018, there have been no other material changes to the provisional tax expense. The discrete tax provision incorporates assumptions made based upon our current interpretation of the Act, existing laws and regulations, and information available through July 20, 2018. The final impact of the Act may differ significantly from this estimates, due to, among other things, changes in interpretations and assumptions made by the Company as a result of additional information, additional guidance that may be issued by the U.S. Department of the Treasury or any other relevant governing body. The accounting for the tax effects for the Act will be completed by December 22, 2018 in accordance with Staff Accounting Bulletin No. 118 (“SAB 118”). In addition, we will record the income tax effects of the global intangible low-taxed income (“GILTI”) as well as all other changes enacted by the Act as incurred for fiscal years beginning after 2018 (our fiscal 2019). Provisional Amounts Deferred tax assets and liabilities: We have re-measured our U.S. deferred tax assets and liabilities based on the relevant tax rates at which they are expected to reverse, which is estimated to be at either at the blended tax rate of 24.5% (applicable for fiscal 2018) or 21% (applicable for fiscal 2019 and later). Because we are still analyzing certain aspects of the Act and refining our calculations, which could potentially affect the measurement of these balances and change our estimated deferred tax amounts, we have recorded a provisional amount related to the re-measurement of our deferred tax balance of $2.6 million. One-time transition tax: The one-time transition tax has been estimated based on our accumulated post-1986 deferred foreign income that has not previously been subject to U.S. income tax. Because we have not yet completed our calculation of the one-time transition tax, we have recorded a provisional income tax expense of $103.2 million related to the one-time transition tax of our foreign subsidiaries. No additional U.S. income taxes have been provided for any remaining undistributed foreign earnings not subject to the transition tax or any additional outside basis difference inherent in these entities as these amounts continue to be indefinitely reinvested in foreign operations.

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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 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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