XML 33 R18.htm IDEA: XBRL DOCUMENT
v3.20.2

Income Taxes | 12 Months Ended
--- | ---
May 02, 2020
Income Tax Disclosure [Abstract] |
Income Taxes | Note 11. Income Taxes Income Tax Provision Details of the Company’s income tax provision are as follows:
|  | Fiscal Year Ended |
|  | May 2, 2020 |  |  | April 27, 2019 |  |  | April 28, 2018 |
(Dollars in Millions) |  | (53 Weeks) |  |  | (52 Weeks) |  |  | (52 Weeks) |
Income (Loss) before Income Taxes: |  |  |  |  |  |  |  |  |  |  |  |
Domestic Source |  | $ | 47.3 |  |  | $ | (0.6 | ) |  | $ | 11.4 |
Foreign Source |  |  | 101.4 |  |  |  | 104.2 |  |  |  | 112.4 |
Income before Income Taxes |  | $ | 148.7 |  |  | $ | 103.6 |  |  | $ | 123.8 |
Current Tax Provision (Benefit): |  |  |  |  |  |  |  |  |  |  |  |
U.S. (Federal and State) |  | $ | 5.1 |  |  | $ | (5.7 | ) |  | $ | 46.8 |
Foreign |  |  | 12.8 |  |  |  | 21.5 |  |  |  | 18.8 |
Subtotal |  |  | 17.9 |  |  |  | 15.8 |  |  |  | 65.6 |
Deferred Tax Provision (Benefit): |  |  |  |  |  |  |  |  |  |  |  |
U.S. (Federal and State) |  |  | 6.1 |  |  |  | 2.5 |  |  |  | 11.6 |
Foreign |  |  | 1.3 |  |  |  | (6.3 | ) |  |  | (10.6 | )
Subtotal |  |  | 7.4 |  |  |  | (3.8 | ) |  |  | 1.0 |
Total Income Tax Expense |  | $ | 25.3 |  |  | $ | 12.0 |  |  | $ | 66.6 |
A reconciliation of the income tax expense to the prevailing statutory federal income tax rate (21.0% for 2020, 21.0% for 2019 and 30.5% for 2018) to pre-tax earnings is as follows:
|  | Fiscal Year Ended |
(Dollars in Millions) |  | May 2, 2020 |  |  | April 27, 2019 |  |  | April 28, 2018 |
Income Tax at Statutory Rate |  | $ | 31.2 |  |  | $ | 21.8 |  |  | $ | 37.7 |
Effect of: |  |  |  |  |  |  |  |  |  |  |  |
State Income Taxes, Net of Federal Benefit |  |  | 1.5 |  |  |  | (0.8 | ) |  |  | 0.1 |
Withholding Taxes |  |  | 2.3 |  |  |  | 1.8 |  |  |  | — |
U.S. Tax Reform Transition Tax |  |  | — |  |  |  | (4.8 | ) |  |  | 48.5 |
Foreign Tax Differential |  |  | (8.3 | ) |  |  | (9.6 | ) |  |  | (15.3 | )
U.S. Tax on Foreign Income |  |  | (1.0 | ) |  |  | 3.4 |  |  |  | — |
Foreign Investment Tax Credit |  |  | (0.8 | ) |  |  | (2.0 | ) |  |  | (9.8 | )
Change in Tax Reserve |  |  | 2.2 |  |  |  | (0.1 | ) |  |  | 0.1 |
Change in Valuation Allowance |  |  | 0.8 |  |  |  | — |  |  |  | 0.4 |
Tax Rate Change, Foreign |  |  | (0.1 | ) |  |  | — |  |  |  | (1.5 | )
U.S. Tax Reform Re-measurements |  |  | — |  |  |  | — |  |  |  | 5.2 |
Other, Net |  |  | (2.5 | ) |  |  | 2.3 |  |  |  | 1.2 |
Income Tax Expense |  | $ | 25.3 |  |  | $ | 12.0 |  |  | $ | 66.6 |
Effective Income Tax Rate |  |  | 17.0 | % |  |  | 11.6 | % |  |  | 53.8 | %
The Company’s fiscal 2020 effective tax rate is primarily affected by the amount of income earned in the jurisdictions in which the Company operates, the amount of tax credits earned, withholding taxes, tax reserves, and the current taxation of foreign earnings. The Company had a favorable impact from operations in foreign countries with tax rates lower than the U.S. statutory tax rate. The Company earned $0.8 million in investment tax credits primarily related to an investment in qualified expenditures. This was offset by a change in tax reserves of $2.2 million and foreign withholding taxes of $2.3 million. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was enacted in response to the COVID-19 pandemic. The CARES Act, among other things, includes various income and payroll tax provisions, modifications to federal net operating loss rules, business interest deduction limitations, and bonus depreciation eligibility for qualified improvement property. The Company does not expect there to be a significant tax impact on its consolidated financial statements at this time and will continue to assess the implications of the CARES Act and its continuing developments and interpretations. In fiscal 2019, the effective tax rate was favorably impacted by the amount of income earned in foreign jurisdictions with lower tax rates and a beneficial adjustment related to the finalization of U.S. Tax Reform of $4.8 million. This adjustment under SAB 118 primarily consists of changes in interpretations and assumptions the Company made, additional regulatory guidance that was issued, and actions the Company took as a result of U.S. Tax Reform. U.S. Tax Reform includes a new global intangible low-taxed income (“GILTI”) provision which requires the Company to include foreign subsidiary earnings in its U.S. tax return starting in fiscal 2019. The Company has elected to recognize the tax on GILTI as a period expense in the period the tax is incurred. In fiscal 2018, the U.S. enacted The Tax Cuts and Jobs Act (“U.S. Tax Reform”) making significant changes to U.S. corporate income tax laws. This included a reduction in the statutory federal corporate income tax rate from 35.0% to 21.0%, an exemption for dividends received from certain foreign subsidiaries, a one-time repatriation tax on deemed repatriated earnings from foreign subsidiaries, immediate expensing of certain depreciable tangible assets, and limiting the deductibility of certain executive compensation. In fiscal 2018, the Company had a favorable impact from earnings in lower taxes jurisdictions. In addition, the Company recorded an unfavorable provisional estimate on the effects of tax law changes in the U.S. due to U.S. Tax Reform of $53.7 million. This was partially offset by a tax law change and recognition of additional foreign investment tax credits. Deferred Income Taxes and Valuation Allowances Significant components of the Company's deferred income tax assets and liabilities were as follows:
(Dollars in Millions) |  | May 2, 2020 |  |  | April 27, 2019 |
Deferred Tax Liabilities: |  |  |  |  |  |  |  |
Depreciation |  | $ | (4.5 | ) |  | $ | (9.0 | )
Amortization |  |  | (47.8 | ) |  |  | (43.9 | )
Foreign Tax |  |  | (1.8 | ) |  |  | (2.0 | )
Lease Liabilities |  |  | (5.2 | ) |  |  | — |
Other Liabilities |  |  | (1.0 | ) |  |  | (0.1 | )
Deferred Tax Liabilities, Gross |  |  | (60.3 | ) |  |  | (55.0 | )
Deferred Tax Assets: |  |  |  |  |  |  |  |
Deferred Compensation and Stock Award Amortization |  |  | 7.0 |  |  |  | 8.6 |
Inventory Valuation Differences |  |  | 2.7 |  |  |  | 1.9 |
Property Valuation Differences |  |  | 0.8 |  |  |  | 1.6 |
Environmental Reserves |  |  | 0.2 |  |  |  | 0.3 |
Lease Assets |  |  | 5.7 |  |  |  | — |
Vacation Accruals |  |  | — |  |  |  | 0.4 |
Foreign Investment Tax Credit |  |  | 25.9 |  |  |  | 28.2 |
Net Operating Loss Carryovers |  |  | 12.9 |  |  |  | 13.8 |
Foreign Tax Credits |  |  | — |  |  |  | 1.1 |
Other |  |  | 1.9 |  |  |  | 3.3 |
Deferred Tax Assets, Gross |  |  | 57.1 |  |  |  | 59.2 |
Less Valuation Allowance |  |  | (7.0 | ) |  |  | (6.3 | )
Deferred Tax Assets, Net of Valuation Allowance |  |  | 50.1 |  |  |  | 52.9 |
Net Deferred Tax Liabilities |  | $ | (10.2 | ) |  | $ | (2.1 | )
Balance Sheet Classification: |  |  |  |  |  |  |  |
Long-term Asset |  |  | 31.4 |  |  |  | 34.3 |
Long-term Liability |  |  | (41.6 | ) |  |  | (36.4 | )
Net Deferred Tax Liabilities |  | $ | (10.2 | ) |  | $ | (2.1 | )
The Company recorded a net deferred tax liability for U.S. and foreign income taxes of $10.2 million for fiscal 2020 and $2.1 million for fiscal 2019. In assessing the realizability of the deferred tax assets, the Company considers whether it is more likely than not that some portion or the entire deferred tax asset will be realized. Ultimately, the realization of the deferred tax asset is dependent upon the generation of sufficient earnings in future periods in which these temporary items can be utilized. In that regard, the Company has a valuation allowance of $7.0 million related to certain state, federal, and foreign net operating loss carryovers and other credits and determined that these deferred tax assets did not reach the more likely than not realizable standard. At May 2, 2020, the Company had available $7.9 million of federal, $4.7 million of state, and $0.3 million of foreign net operating loss carryforwards with a valuation allowance of $5.3 million of federal and $1.7 million of state. If unused, the U.S. federal net operating loss carryforwards will expire in the years 2021 through 2034. The state net operating loss carryforwards will expire in the years 2021 through 2037. The Company earns investment tax credits of 30.0% for certain qualified expenditures in foreign jurisdictions. Total unused credits are $25.9 million as of May 2, 2020, all of which can be carried forward indefinitely. Indefinite Reinvestment The Company has not provided for deferred income taxes on the undistributed earnings of foreign subsidiaries except for certain identified amounts. The amount the Company expects to repatriate is based on a variety of factors including current year earnings of the foreign subsidiaries, foreign investment needs, and U.S. cash flow considerations. The Company considers the remaining undistributed foreign earnings that are not specifically identified to be indefinitely reinvested. It is not practicable to determine the amount of deferred tax liability on such foreign earnings as the actual tax liability is dependent on circumstances that exist when the remittance occurs. Unrecognized Tax Benefits The Company operates in multiple jurisdictions throughout the world and the income tax returns of its subsidiaries in various jurisdictions are subject to periodic examination by the tax authorities. The Company regularly assesses the status of these examinations and the various outcomes to determine the adequacy of its provision for income taxes. The amount of gross unrecognized tax benefits totaled $5.2 million and $3.1 million at May 2, 2020 and April 27, 2019, respectively. These amounts represent the amount of unrecognized benefits that, if recognized, would favorably impact the effective tax rate if resolved in the Company’s favor. The Company recognizes interest and penalties related to income tax uncertainties in income tax expense. Accrued interest and penalties at May 2, 2020 and April 27, 2019 were not significant. The following table presents a reconciliation of the beginning and ending amounts of unrecognized tax benefits:
(Dollars in Millions) |  | May 2, 2020 |  |  | April 27, 2019 |
Balance at Beginning of Fiscal Year |  | $ | 3.1 |  |  | $ | 1.4 |
Increases for Positions Related to the Prior Years |  |  | 1.9 |  |  |  | 1.8 |
Increases for Positions Related to the Current Year |  |  | 0.3 |  |  |  | 0.9 |
Lapsing of Statutes of Limitations |  |  | (0.1 | ) |  |  | (1.0 | )
Balance at End of Fiscal Year |  | $ | 5.2 |  |  | $ | 3.1 |
At May 2, 2020, it is not possible to reasonably estimate the expected change to the total amount of unrecognized tax benefits in the next twelve months. The U.S. federal statute of limitations remains open for fiscal years ended on or after 2017 and for state tax purposes on or after fiscal year 2013. Tax authorities may have the ability to review and adjust net operating losses or tax credits that were generated prior to these fiscal years. In the major foreign jurisdictions, fiscal 2013 and subsequent periods remain open and subject to examination by taxing authorities.

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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration