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Income Taxes | 12 Months Ended
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Mar. 31, 2018
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes The Company is incorporated in Switzerland but operates in various countries with differing tax laws and rates. Further, a portion of the Company's income (loss) before taxes and the provision for (benefit from) income taxes is generated outside of Switzerland. Income from continuing operations before income taxes for the fiscal years 2018, 2017 and 2016 is summarized as follows (in thousands):
|  | Years Ended March 31,
|  | 2018 |  | 2017 |  | 2016
Swiss |  | $ | 177,935 |  |  | $ | 161,544 |  |  | $ | 80,572 |
Non-Swiss |  | 54,330 |  |  | 53,445 |  |  | 50,900 |
Income before taxes |  | $ | 232,265 |  |  | $ | 214,989 |  |  | $ | 131,472 |
The provision for (benefit from) income taxes is summarized as follows (in thousands):
|  | Years Ended March 31,
|  | 2018 |  | 2017 |  | 2016
Current: |  |  |  |  |  |
Swiss |  | $ | 3,526 |  |  | $ | 1,934 |  |  | $ | 1,668 |
Non-Swiss |  | 13,142 |  |  | 9,774 |  |  | (2,582 | )
Deferred: |  |  |  |  |  |
Non-Swiss |  | 7,055 |  |  | (2,595 | ) |  | 4,024 |
Provision for income taxes |  | $ | 23,723 |  |  | $ | 9,113 |  |  | $ | 3,110 |
The difference between the provision for income taxes and the expected tax provision at the statutory income tax rate of 8.5% is reconciled below (in thousands):
|  | Years Ended March 31,
|  | 2018 |  | 2017 |  | 2016
Expected tax provision at statutory income tax rates |  | $ | 19,743 |  |  | $ | 18,274 |  |  | $ | 11,175 |
Income taxes at different rates |  | (9,611 | ) |  | (5,247 | ) |  | (2,713 | )
Research and development tax credits |  | (4,124 | ) |  | (2,309 | ) |  | (1,619 | )
Executive compensation |  | 1,835 |  |  | 654 |  |  | 864 |
Stock-based compensation |  | (9,376 | ) |  | 1,794 |  |  | 1,446 |
Deferred tax effects from Tax Act |  | 22,325 |  |  | — |  |  | — |
Valuation allowance |  | 533 |  |  | 1,024 |  |  | 947 |
Restructuring charges / (credits) |  | (10 | ) |  | 2 |  |  | 1,514 |
Tax reserves (releases), net |  | 3,627 |  |  | (5,570 | ) |  | (8,761 | )
Other, net |  | (1,219 | ) |  | 491 |  |  | 257 |
Provision for income taxes |  | $ | 23,723 |  |  | $ | 9,113 |  |  | $ | 3,110 |
Deferred income tax assets and liabilities consist of the following (in thousands):
|  | March 31,
|  | 2018 |  | 2017
Deferred tax assets: |  |  |  |  |  |
Net operating loss carryforwards |  | $ | 15,476 |  |  | $ | 4,306 |
Tax credit carryforwards |  | 45,421 |  |  | 5,825 |
Accruals |  | 42,765 |  |  | 41,570 |
Depreciation and amortization |  | 1,505 |  |  | 2,860 |
Share-based compensation |  | 7,479 |  |  | 11,846 |
Gross deferred tax assets |  | 112,646 |  |  | 66,407 |
Valuation allowance |  | (25,148 | ) |  | (6,626 | )
Gross deferred tax assets after valuation allowance |  | 87,498 |  |  | 59,781 |
Deferred tax liabilities: |  |  |  |  |  |
Acquired intangible assets and other |  | (4,827 | ) |  | (4,267 | )
Gross deferred tax liabilities |  | (4,827 | ) |  | (4,267 | )
Deferred tax assets, net |  | $ | 82,671 |  |  | $ | 55,514 |
On December 22, 2017, the Tax Act was signed into law in the United States. The Tax Act introduced a broad range of tax reform measures that significantly change the federal income tax regime. Among other things, the Tax Act permanently reduces the corporate income tax rate from 35% to 21% effective for tax years including or commencing on January 1, 2018, repeals corporate alternative minimum tax, limits various business deductions such as executive compensation under IRC 162(m), modifies the maximum deduction of net operating loss with no carryback but indefinite carryforward provision. On the international front, the Tax Act enacted a transition tax on applicable accumulated earnings of United States owned foreign subsidiaries and various other provisions. The majority of the international provisions are not applicable to the Company. Many provisions in the Tax Act are generally effective in tax years beginning after December 31, 2017. ASC 740 requires recognition of the effects of tax law changes in the period of enactment. The Company applied a blended federal income tax rate of 31.6% to its operations in the United States effective at the beginning of the fiscal year based on a pro-rated percentage of the number of days before and after January 1, 2018. Furthermore, the Company recorded a provisional income tax charge net of valuation allowance of $21.7 million in fiscal year 2018 to remeasure the deferred tax effects at 21%. The net provisional charge from remeasuring gross deferred tax assets of approximately $35.0 million and assessment of valuation allowance is based on currently available information and interpretations which are continuing to evolve. The Company continues to analyze additional information and guidance related to certain aspects of the Tax Act, such as limitations on the deductibility of executive compensation, conformity or changes by state taxing authorities in response to the Tax Act, and the final determination of the net deferred tax assets subject to the remeasurement and related impacts to the assessment of valuation allowance. The prospects of supplemental legislation or regulatory processes to address questions that arise because of the Tax Act, or evolving technical interpretations of the tax law, may cause the final impact from the Tax Act to differ from the recorded amounts. The measurement period allowed by Staff SAB No.118 is no later than the third quarter of fiscal year 2019. Management regularly assesses the ability to realize deferred tax assets recorded in the Company's entities based upon the weight of available evidence, including such factors as recent earnings history and expected future taxable income. In the event that the Company changes its determination as to the amount of deferred tax assets that can be realized, the Company will adjust its valuation allowance with a corresponding impact to the provision for income taxes in the period in which such determination is made. The Company had a valuation allowance of $25.1 million at March 31, 2018, increased from $6.6 million at March 31, 2017 primarily due to $18.0 million increase for deferred tax assets upon the adoption of ASU 2016-09 on April 1, 2017. The adoption generated federal valuation allowance of $6.4 million and added $11.6 million to California valuation allowance in the United States. The federal valuation allowance was subsequently reduced by $4.1 million from the assessment of the Tax Act against tax credits. The Company had a valuation allowance of $22.1 million as of March 31, 2018 against deferred tax assets in the state of California, an increase from $5.9 million as of March 31, 2017 primarily due to the adoption of ASU 2016-09 described above and impact from the Tax Act in the amount of $3.5 million. The remaining valuation allowance primarily represents $0.7 million for various tax credit carryforwards. The Company determined that it is more likely than not that the Company would not generate sufficient taxable income in the future to utilize such deferred tax assets. As of March 31, 2018, the Company had foreign net operating loss and tax credit carryforwards for income tax purposes of $217.1 million and $50.5 million. Unused net operating loss carryforwards will expire at various dates in fiscal years 2019 to 2038. Certain net operating loss carryforwards in the United States relate to acquisitions and, as a result, are limited in the amount that can be utilized in any one year. The tax credit carryforwards will begin to expire in fiscal year 2020. Swiss income taxes and non-Swiss withholding taxes associated with the repatriation of earnings or for other temporary differences related to investments in non-Swiss subsidiaries have not been provided for, as the Company intends to reinvest the earnings of such subsidiaries indefinitely or the Company has concluded that no additional tax liability would arise on the distribution of such earnings. If these earnings were distributed to Switzerland in the form of dividends or otherwise, or if the shares of the relevant non-Swiss subsidiaries were sold or otherwise transferred, the Company may be subject to additional Swiss income taxes and non-Swiss withholding taxes. As of March 31, 2018, the cumulative amount of unremitted earnings of non-Swiss subsidiaries for which no income taxes have been provided is approximately $90.4 million. The amount of unrecognized deferred income tax liability related to these earnings is estimated to be approximately $0.6 million. The Company follows a two-step approach in recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon ultimate settlement. As of March 31, 2018 and March 31, 2017, the total amount of unrecognized tax benefits due to uncertain tax positions was $69.1 million and $63.7 million, respectively, all of which would affect the effective income tax rate if recognized. As of March 31, 2018, the Company had $35.0 million in non-current income taxes payable, including interest and penalties, related to the Company's income tax liability for uncertain tax positions. As of March 31, 2017, the Company had $51.8 million in non-current income taxes payable and $1.5 million in current income taxes payable, including interest and penalties, related to the Company's income tax liability for uncertain tax positions. The Company applied to a settlement program and paid $1.9 million to the tax authorities in a foreign jurisdiction in the third quarter of fiscal year 2018. The audit was effectively settled in the fourth quarter. The aggregate changes in gross unrecognized tax benefits in fiscal years 2018, 2017 and 2016 were as follows (in thousands):
March 31, 2015 |  | $ | 79,023 |
Lapse of statute of limitations |  | (15,518 | )
Decreases in balances related to tax positions taken during prior years |  | (1,502 | )
Increases in balances related to tax positions taken during the year |  | 7,876 |
March 31, 2016 |  | $ | 69,879 |
Lapse of statute of limitations |  | (14,161 | )
Decreases in balances related to tax positions taken during prior years |  | (1,610 | )
Increases in balances related to tax positions taken during the year |  | 9,559 |
March 31, 2017 |  | $ | 63,667 |
Lapse of statute of limitations |  | (7,505 | )
Settlements with tax authorities |  | (704 | )
Increases in balances related to tax positions taken during the year |  | 13,673 |
March 31, 2018 |  | $ | 69,131 |
The Company recognizes interest and penalties related to unrecognized tax positions in income tax expense. The Company recognized $0.6 million, $0.7 million and $0.3 million in interest and penalties in income tax expense during fiscal years 2018, 2017 and 2016, respectively. As of March 31, 2018, 2017 and 2016, the Company had $2.3 million, $3.0 million and $3.6 million of accrued interest and penalties related to uncertain tax positions, respectively. The Company files Swiss and foreign tax returns. The Company received final tax assessments in Switzerland through fiscal year 2014. For other foreign jurisdictions such as the United States, the Company is generally not subject to tax examinations for years prior to fiscal year 2015. The Company is under examination and has received assessment notices in foreign tax jurisdictions. If the examinations are resolved unfavorably, there is a possibility they may have a material negative impact on its results of operations. Although the Company has adequately provided for uncertain tax positions, the provisions on these positions may change as revised estimates are made or the underlying matters are settled or otherwise resolved. During the next 12 months, it is reasonably possible that the amount of unrecognized tax benefits could increase or decrease significantly due to changes in tax law in various jurisdictions, new tax audits and changes in the U.S. Dollar as compared to other currencies. Excluding these factors, uncertain tax positions may decrease by as much as $21.9 million primarily from the lapse of the statutes of limitations in various jurisdictions during the next 12 months.

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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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