XML 55 R39.htm IDEA: XBRL DOCUMENT
v3.7.0.1

Income Taxes (Tables) | 12 Months Ended
--- | ---
Jun. 25, 2017
Income Tax Disclosure [Abstract] |
Components of Income Before Income Taxes | The following were the components of loss before income taxes (in thousands):
| Fiscal Years Ended
| June 25, 2017 |  | June 26, 2016 |  | June 28, 2015
Domestic |  | ($43,195 | ) |  |  | ($45,278 | ) |  |  | ($41,593 | )
Foreign | 38,531 |  |  | 21,772 |  |  | (42,346 | )
Total loss before income taxes |  | ($4,664 | ) |  |  | ($23,506 | ) |  |  | ($83,939 | )
Components of Income Tax Expense | The following were the components of income tax expense (benefit) (in thousands):
| Fiscal Years Ended
| June 25, 2017 |  | June 26, 2016 |  | June 28, 2015
Current: |  |  |  |  |
Federal |  | $10,304 |  |  |  | $5,347 |  |  |  | ($12,470 | )
Foreign | 7,332 |  |  | 7,278 |  |  | 13,327 |
State | 900 |  |  | 1,244 |  |  | 1,242 |
Total current | 18,536 |  |  | 13,869 |  |  | 2,099 |
Deferred: |  |  |  |  |
Federal | 68,199 |  |  | (26,086 | ) |  | (7,418 | )
Foreign | 190 |  |  | 12,340 |  |  | (12,754 | )
State | 6,529 |  |  | (2,093 | ) |  | (1,174 | )
Total deferred | 74,918 |  |  | (15,839 | ) |  | (21,346 | )
Income tax expense (benefit) |  | $93,454 |  |  |  | ($1,970 | ) |  |  | ($19,247 | )
Schedule of Effective Income Tax Rate and Amount Reconciliation | Actual income tax expense (benefit) differed from the amount computed by applying the U.S. federal tax rate of 35% to pre-tax earnings as a result of the following (in thousands, except percentages):
| Fiscal Years Ended
| June 25, 2017 |  | % of Loss |  | June 26, 2016 |  | % of Loss |  | June 28, 2015 |  | % of Income
Federal income tax provision at statutory rate |  | ($1,632 | ) |  | 35% |  |  | ($8,227 | ) |  | 35% |  |  | ($29,379 | ) |  | 35%
(Decrease) increase in income tax expense resulting from: |  |  |  |  |  |  |  |  |  |  |
State tax provision, net of federal benefit | (727 | ) |  | 16% |  | (748 | ) |  | 3% |  | (817 | ) |  | 1%
State tax credits | (69 | ) |  | 1% |  | (269 | ) |  | 1% |  | (585 | ) |  | 1%
Tax exempt interest | (1,243 | ) |  | 27% |  | (2,019 | ) |  | 9% |  | (2,413 | ) |  | 3%
48C investment tax credit | (4,383 | ) |  | 94% |  | (4,334 | ) |  | 18% |  | (6,826 | ) |  | 8%
(Decrease) increase in tax reserve | (3,587 | ) |  | 77% |  | (80 | ) |  | —% |  | (225 | ) |  | —%
Research and development credits | (1,728 | ) |  | 37% |  | (2,138 | ) |  | 9% |  | (2,081 | ) |  | 2%
Foreign tax credit | (1,114 | ) |  | 24% |  | (954 | ) |  | 4% |  | (389 | ) |  | —%
Increase (decrease) in valuation allowance | 108,077 |  |  | (2,318)% |  | 9,286 |  |  | (39)% |  | — |  |  | —%
Qualified production activities deduction | — |  |  | —% |  | — |  |  | —% |  | (520 | ) |  | 1%
Stock-based compensation | 1,389 |  |  | (30)% |  | 1,346 |  |  | (6)% |  | 2,988 |  |  | (4)%
Statutory rate differences | (5,162 | ) |  | 111% |  | 2,748 |  |  | (12)% |  | 18,738 |  |  | (22)%
Foreign earnings taxed in U.S. | 1,313 |  |  | (28)% |  | 1,165 |  |  | (5)% |  | 1,793 |  |  | (2)%
Foreign currency fluctuations | 841 |  |  | (18)% |  | 748 |  |  | (3)% |  | (818 | ) |  | 1%
Other foreign adjustments | 715 |  |  | (15)% |  | 13 |  |  | —% |  | (83 | ) |  | —%
Net operating loss carryback | 494 |  |  | (11)% |  | 238 |  |  | (1)% |  | — |  |  | —%
Provision to return adjustments | 165 |  |  | (4)% |  | (10 | ) |  | —% |  | 391 |  |  | —%
Other | 105 |  |  | (2)% |  | 1,265 |  |  | (5)% |  | 979 |  |  | (1)%
Income tax expense (benefit) |  | $93,454 |  |  | (2,004)% |  |  | ($1,970 | ) |  | 8% |  |  | ($19,247 | ) |  | 23%
Schedule of Tax Effects of Temporary Differences that Give Rise to Significant Portions of Deferred Tax Assets and Liabilities | The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities were as follows (in thousands):
| June 25, 2017 |  | June 26, 2016
Deferred tax assets: |  |  |
Compensation |  | $3,029 |  |  |  | $3,176 |
Inventories | 21,042 |  |  | 19,656 |
Sales return reserve and allowance for bad debts | 8,480 |  |  | 6,615 |
Warranty reserve | 10,340 |  |  | 8,013 |
Federal and state net operating loss carryforwards | 21,776 |  |  | 11,443 |
Federal credits | 13,425 |  |  | 8,802 |
State credits | 3,507 |  |  | 3,286 |
48C investment tax credits | 23,525 |  |  | 17,838 |
Investments | 796 |  |  | 872 |
Stock-based compensation | 46,922 |  |  | 48,191 |
Deferred revenue | 3,262 |  |  | 4,159 |
Other | 2,522 |  |  | 2,792 |
Total gross deferred assets | 158,626 |  |  | 134,843 |
Less valuation allowance | (107,544 | ) |  | (10,770 | )
Deferred tax assets, net | 51,082 |  |  | 124,073 |
Deferred tax liabilities: |  |  |
Property and equipment | (7,443 | ) |  | (9,549 | )
Intangible assets | (73,692 | ) |  | (69,355 | )
Investments | (4,102 | ) |  | (2,445 | )
Prepaid taxes and other | (1,461 | ) |  | (1,527 | )
Foreign earnings recapture | (2,481 | ) |  | (3,576 | )
Total gross deferred liability | (89,179 | ) |  | (86,452 | )
Deferred tax (liability) asset, net |  | ($38,097 | ) |  |  | $37,621 |
Components Giving Rise to Net Deferred Tax Assets (Liabilities) Included in Accompanying Consolidated Balance Sheet | The components giving rise to the net deferred tax assets (liabilities) have been included in the Consolidated Balance Sheets as follows (in thousands):
| Balance at June 25, 2017
| Assets |  | Liabilities
| Current |  | Noncurrent |  | Current |  | Noncurrent
U.S. federal income taxes |  | $— |  |  |  | $— |  |  |  | $— |  |  |  | ($49,103 | )
Foreign income taxes | — |  |  | 11,763 |  |  | — |  |  | (757 | )
Total net deferred tax assets/(liabilities) |  | $— |  |  |  | $11,763 |  |  |  | $— |  |  |  | ($49,860 | )
| Balance at June 26, 2016
| Assets |  | Liabilities
| Current |  | Noncurrent |  | Current |  | Noncurrent
U.S. federal income taxes |  | $— |  |  |  | $26,411 |  |  |  | $— |  |  |  | $— |
Foreign income taxes | — |  |  | 12,153 |  |  | — |  |  | (943 | )
Total net deferred tax assets/(liabilities) |  | $— |  |  |  | $38,564 |  |  |  | $— |  |  |  | ($943 | )
Reconciliation of the Change in Uncertain Tax Positions | The following is a tabular reconciliation of the Company’s change in uncertain tax positions (in thousands):
| Fiscal Years Ended
| June 25, 2017 |  | June 26, 2016 |  | June 28, 2015
Balance at beginning of period |  | $17,727 |  |  |  | $17,795 |  |  |  | $18,389 |
Increases related to prior year tax positions | — |  |  | 617 |  |  | — |
Decreases related to prior year tax positions | (100 | ) |  | (530 | ) |  | (407 | )
Settlements with tax authorities | (608 | ) |  | — |  |  | — |
Expiration of statute of limitations for assessment of taxes | (3,681 | ) |  | (155 | ) |  | (187 | )
Balance at end of period |  | $13,338 |  |  |  | $17,727 |  |  |  | $17,795 |
The Company’s policy is to include interest and penalties related to unrecognized tax benefits within the Income tax (benefit) expense line item in the Consolidated Statements of Loss. Total interest and penalties accrued were as follows (in thousands):
| June 25, 2017 |  | June 26, 2016
Accrued interest and penalties |  | $2 |  |  |  | ($5 | )
Total interest and penalties recognized were as follows (in thousands):
| Fiscal Years Ended
| June 25, 2017 |  | June 26, 2016 |  | June 28, 2015
Recognized interest and penalties (benefit) |  | $7 |  |  |  | ($15 | ) |  |  | ($94 | )

X
- Definition Components giving rise to the net deferred tax assets (liabilities) by geographic location and balance sheet classification. + References No definition available. + Details
Name: | cree_ScheduleOfDeferredTaxAssetsAndLiabilitiesByGeographicLocationTableTextBlock
Namespace Prefix: | cree_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

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 Tabular disclosure of the components of income tax expense attributable to continuing operations for each year presented including, but not limited to: current tax expense (benefit), deferred tax expense (benefit), investment tax credits, government grants, the benefits of operating loss carryforwards, tax expense that results from allocating certain tax benefits either directly to contributed capital or to reduce goodwill or other noncurrent intangible assets of an acquired entity, adjustments of a deferred tax liability or asset for enacted changes in tax laws or rates or a change in the tax status of the entity, and adjustments of the beginning-of-the-year balances of a valuation allowance because of a change in circumstances that causes a change in judgment about the realizability of the related deferred tax asset in future years. + References Reference 1: 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=65882285&loc=d3e32639-109319 + Details
Name: | us-gaap_ScheduleOfComponentsOfIncomeTaxExpenseBenefitTableTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition Tabular disclosure of the components of net deferred tax asset or liability recognized in an entity's statement of financial position, including the following: the total of all deferred tax liabilities, the total of all deferred tax assets, the total valuation allowance recognized for deferred tax assets. + References Reference 1: 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=65882285&loc=d3e32537-109319 + Details
Name: | us-gaap_ScheduleOfDeferredTaxAssetsAndLiabilitiesTableTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition Tabular disclosure of the reconciliation using percentage or dollar amounts of the reported amount of income tax expense attributable to continuing operations for the year to the amount of income tax expense that would result from applying domestic federal statutory tax rates to pretax income from continuing operations. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 12 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32687-109319 + Details
Name: | us-gaap_ScheduleOfEffectiveIncomeTaxRateReconciliationTableTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition Tabular disclosure of income before income tax between domestic and foreign jurisdictions. + References Reference 1: 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)(1)(i)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 + Details
Name: | us-gaap_ScheduleOfIncomeBeforeIncomeTaxDomesticAndForeignTableTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition Tabular disclosure for tax positions taken in the tax returns filed or to be filed for which it is more likely than not that the tax position will not be sustained upon examination by taxing authorities and other income tax contingencies. Includes, but is not limited to, interest and penalties, reconciliation of unrecognized tax benefits, unrecognized tax benefits that would affect the effective tax rate, tax years that remain subject to examination by tax jurisdictions, and information about positions for which it is reasonably possible that amounts unrecognized will significantly change within 12 months. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15A -URI http://asc.fasb.org/extlink&oid=65882285&loc=SL6600010-109319 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -Subparagraph (d) -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32718-109319 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 19 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32840-109319 + Details
Name: | us-gaap_SummaryOfIncomeTaxContingenciesTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration