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INCOME TAXES | 12 Months Ended
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Oct. 01, 2022
Income Tax Disclosure [Abstract] |
INCOME TAXES | INCOME TAXES The following table reflects U.S. and foreign income (loss) before income taxes for fiscal 2022, 2021, and 2020:
| Fiscal
(in thousands) | 2022 |  | 2021 |  | 2020
United States | $ | (11,415) |  |  | $ | (8,853) |  |  | $ | (14,909) |
Foreign | 488,403 |  |  | 423,403 |  |  | 79,243 |
Income before income taxes | $ | 476,988 |  |  | $ | 414,550 |  |  | $ | 64,334 |
The following table reflects the current and deferred components of provision for (benefit from) income taxes for fiscal 2022, 2021, and 2020:
| Fiscal
(in thousands) | 2022 |  | 2021 |  | 2020
Current: |  |  |  |  |
Federal | $ | 14,975 |  |  | $ | 26,563 |  |  | $ | 5,129 |
State | 246 |  |  | 261 |  |  | 89 |
Foreign | 37,448 |  |  | 30,771 |  |  | 6,508 |
Deferred: |  |  |  |  |
Federal | (5,809) |  |  | (2,979) |  |  | (690) |
State | — |  |  | — |  |  | — |
Foreign | (3,417) |  |  | (7,321) |  |  | 962 |
Provision for income taxes | $ | 43,443 |  |  | $ | 47,295 |  |  | $ | 11,998 |
The following table reconciles the provision for (benefit from) income taxes with the expected income tax provision computed based on the applicable U.S. federal statutory tax rate for fiscal 2022, 2021, and 2020:
| Fiscal |
(dollar amounts in thousands) | 2022 |  | 2021 |  | 2020 |
Expected income tax provision based on the U.S. federal statutory tax rate | $ | 100,212 |  |  | $ | 86,915 |  |  | $ | 13,510 |  |
Effect of earnings of foreign subsidiaries subject to different tax rates | (17,936) |  |  | (15,028) |  |  | (1,634) |  |
Benefit from tax incentives | (50,113) |  |  | (45,501) |  |  | (6,781) |  |
Benefit from research and development tax credits | (2,995) |  |  | (2,705) |  |  | (2,915) |  |
Benefit from foreign tax credits | (26,021) |  |  | (20,281) |  |  | (1,701) |  |
Valuation allowance | (5,830) |  |  | (11,620) |  |  | 1,224 |  |
Foreign operations (Deemed income, taxes on undistributed foreign earnings, and withholding taxes) | 45,421 |  |  | 52,414 |  |  | 8,886 |  |
Non-deductible items | 267 |  |  | 113 |  |  | 1,232 |  |
Other, net (1) | 438 |  |  | 2,988 |  |  | 177 |  |
Provision for income taxes | $ | 43,443 |  |  | $ | 47,295 |  |  | $ | 11,998 |  |
Effective tax rate | 9.1 | % |  | 11.4 | % |  | 18.6 | % |
(1) Certain balances in fiscal 2021 and 2020 have been reclassified to conform to the current period presentation. These reclassifications have no impact to the consolidated financial statements in fiscal 2021 and 2020. For fiscal 2022 and 2021, the effective tax rate differed from the U.S. federal statutory tax rate primarily due to tax benefits from tax incentives, foreign earnings subject to a lower statutory tax rate than the U.S. federal statutory tax rate, tax credits generated during the fiscal year, and the net release of valuation allowances recorded against certain loss and credit carryforwards, partially offset by tax expense related to deemed income and undistributed foreign earnings. As of October 2, 2022, a large portion of the Company’s undistributed foreign earnings are not considered to be indefinitely reinvested outside the U.S. and are expected to be available for use in the U.S. without incurring additional U.S. income tax. Further, we operate in a number of foreign jurisdictions, including Singapore, where we have a tax incentive that allows for a reduced tax rate on certain classes of income, provided the Company meets certain employment and investment conditions through the expiration date in fiscal 2025. In fiscal 2022, 2021, and 2020, the tax incentive arrangement helped to reduce the Company’s provision for income taxes by $50.1 million or $0.82 per share, $45.5 million or $0.72 per share and $6.8 million or $0.11 per share, respectively. The following table reflects deferred tax balances based on the tax effects of cumulative temporary differences for fiscal 2022 and 2021:
| Fiscal
(in thousands) | 2022 |  | 2021
Accruals and reserves | $ | 14,168 |  |  | $ | 11,890 |
Tax credit carryforwards | 3,893 |  |  | 4,230 |
Fixed and intangible assets | 5,963 |  |  | 465 |
Net operating loss carryforwards | 15,329 |  |  | 28,913 |
Gross deferred tax assets | $ | 39,353 |  |  | $ | 45,498 |
Valuation allowance | $ | (21,750) |  |  | $ | (34,095) |
Deferred tax assets, net of valuation allowance | $ | 17,603 |  |  | $ | 11,403 |
Taxes on undistributed foreign earnings | $ | (26,068) |  |  | $ | (28,516) |
Deferred tax liabilities | $ | (26,068) |  |  | $ | (28,516) |
Net deferred tax liabilities | $ | (8,465) |  |  | $ | (17,113) |
Reported as |  |  |
Deferred tax assets | $ | 25,572 |  |  | $ | 15,715 |
Deferred tax liabilities | (34,037) |  |  | (32,828) |
Net deferred tax liabilities | $ | (8,465) |  |  | $ | (17,113) |
As of October 1, 2022, the Company has foreign net operating loss carryforwards of $37.9 million, state net operating loss carryforwards of $54.6 million, and U.S. federal and state tax credit carryforwards of $6.5 million that can be used to offset future income tax obligations. These net operating loss and tax credit carryforwards can be utilized prior to their expiration dates in fiscal years 2023 through 2041, except for certain credits and foreign net operating losses that can be carried forward indefinitely. The Company has recorded valuation allowances against certain foreign and state net operating loss carryforwards and state tax credits which are expected to expire unutilized. The following table reconciles the beginning and ending balances of the Company’s unrecognized tax benefit, excluding related accrued interest and penalties, for fiscal 2022, 2021, and 2020:
|  | Fiscal
(in thousands) |  | 2022 |  | 2021 |  | 2020
Unrecognized tax benefit, beginning of year |  | $ | 14,922 |  |  | $ | 13,064 |  |  | $ | 12,925 |
Additions for tax positions, current year |  | 2,288 |  |  | 4,003 |  |  | 537 |
Reductions for tax positions, prior year |  | (587) |  |  | (2,145) |  |  | (398) |
Unrecognized tax benefit, end of year |  | $ | 16,623 |  |  | $ | 14,922 |  |  | $ | 13,064 |
The Company recognizes interest and penalties related to potential income tax liabilities as a component of unrecognized tax benefit and in provision for income taxes. The amount of interest and penalties related to unrecognized tax benefit recorded in fiscal 2022 provision for income taxes is not material. As of October 1, 2022, the Company has recognized $2.0 million of accrued interest and penalties related to unrecognized tax benefit within the income tax payable for uncertain tax positions and approximately $17.1 million of unrecognized tax benefit, including related interest and penalties, that if recognized, would impact the Company’s effective tax rate. It is reasonably possible that the amount of the unrecognized tax benefit with respect to certain uncertain 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. Given the number of years and numerous matters that remain subject to examination in various tax jurisdictions, we cannot practicably estimate the financial outcomes of these examinations. The Company files a U.S. federal income tax return, as well as income tax returns in various state and foreign jurisdictions. For U.S. federal income tax returns purposes, tax years from fiscal 2019 remain subject to examination. For most state tax returns, tax years following fiscal 2003 remain subject to examination as a result of the generation of net operating loss carryforwards. In the foreign jurisdictions where the Company files income tax returns, the statutes of limitations with respect to these jurisdictions vary from jurisdiction to jurisdiction and range from 4 to 6 years. The Company’s tax returns are currently under examination by tax authorities in multiple state and foreign jurisdictions. The Company believes that adequate provisions have been made for any adjustments that may result from the examination.

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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/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI https://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI https://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
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