
	Fiscal Year Ended March 31,
	2021		2020		2019
Pretax (loss) income:
U.S.	$	(301.7)	$	(485.2)	$	(593.4)
Foreign	641.2		635.6		797.9
	$	339.5	$	150.4	$	204.5
Current expense (benefit):
U.S. Federal	$	54.8	$	21.1	$	(98.0)
State	2.0		1.0		(5.3)
Foreign	72.2		48.0		14.1
Total current expense (benefit)	$	129.0	$	70.1	$	(89.2)
Deferred expense (benefit):
U.S. Federal	$	(215.4)	$	(127.8)	$	11.9
State	(22.9)		(13.2)		0.6
Foreign	99.4		(349.3)		(74.7)
Total deferred benefit	(138.9)		(490.3)		(62.2)
Total income tax benefit	$	(9.9)	$	(420.2)	$	(151.4)

The Company intends to invest substantially all of its foreign subsidiary earnings, as well as its capital in its foreign subsidiaries, indefinitely outside of the U.S. in those jurisdictions in which the Company would incur significant, additional costs upon repatriation of such amounts. It is not practical to estimate the additional tax that would be incurred, if any, if the permanently reinvested earnings were repatriated.


	Fiscal Year Ended March 31,
	2021		2020		2019
Computed expected income tax provision	$	71.3	$	31.5	$	43.0
State income taxes, net of federal benefit	(3.8)		(5.4)		(8.7)
Foreign income taxed at lower than the federal rate	(45.7)		(78.8)		(94.0)
Impact of the TCJA - one-time transition tax, net of foreign tax credits	—		—		13.1

GILTI and foreign-derived intangible income, net of credits	101.8		54.7		95.4
Business realignment of intellectual property rights	(63.8)		(334.8)		(90.6)
Net increases related to current year tax positions	49.8		20.1		9.0
Net decreases related to prior year tax positions (1)	(4.4)		(28.5)		(75.1)
Share-based compensation	(12.3)		(11.1)		(13.3)
Research and development tax credits	(48.4)		(40.8)		(27.5)

Intercompany prepaid tax asset amortization	—		—		5.2

Foreign exchange	(6.5)		(0.9)		4.6
Convertible debt settlement	(48.1)		—		—
Subpart-F income	6.4		4.1		10.7
Other	7.1		(1.7)		(13.3)
Change in valuation allowance	(13.3)		(28.6)		(9.9)
Total income tax benefit	$	(9.9)	$	(420.2)	$	(151.4)

(1) The release of prior year tax positions during fiscal 2021 increased each of the basic and diluted net income per common share by $0.02. The release of prior year tax positions during fiscal 2020 increased the basic and diluted net income per common share by $0.12 and $0.11, respectively. The release of prior year tax positions during fiscal 2019 increased the basic and diluted net income per common share by $0.32 and $0.30, respectively.

The foreign tax rate differential benefit primarily relates to the Company's operations in Thailand, Malta and Ireland. The Company's Thailand manufacturing operations are currently subject to numerous tax holidays granted to the Company based on its investment in property, plant and equipment in Thailand. The Company's tax holiday periods in Thailand expire between fiscal 2022 and 2027, however, the Company actively seeks to obtain new tax holidays. The Company does not expect the future expiration of any of its tax holiday periods in Thailand to have a material impact on its effective tax rate. The aggregate dollar benefit derived from these tax holidays approximated $11.1 million and $11.4 million in fiscal 2021 and fiscal 2020 , respectively. The impact of the tax holidays during fiscal 2021 increased each of the basic and diluted net income per common share by $0.04. The impact of the tax holidays during fiscal 2020 increased the basic and diluted net income per common share by $0.05 and $0.04, respectively.

The Company's effective tax rate for fiscal 2021 includes a $63.8 million tax benefit related to intra-group transfers of certain intellectual property rights, which reduced its effective tax rate by 18.8%. The tax benefit for the intra-group asset transfers primarily consisted of $155.5 million recorded as a deferred tax asset which represents the book and tax basis difference on the transferred assets measured based on the new applicable statutory tax rate, as well as, the reversal of the pre-existing deferred tax asset of $90.3 million, which represents the book and tax basis difference on the transferred assets measured based on applicable statutory tax rate prior to the transfer. The Company expects to be able to realize the future tax benefit of the deferred tax assets resulting from the intra-group asset transfers. It is not uncommon for taxing authorities of different countries to have conflicting views, for instance, with respect to, among other things, the manner in which the arm’s length standard is applied with respect to the valuation of intellectual property rights. The taxing authorities of jurisdictions in which the Company operates may challenge its methodologies for valuing the intellectual property rights transferred, which could increase the Company's future effective income tax rate and harm future results of operations.


	March 31,
	2021		2020
Deferred tax assets:

Inventory valuation	$	46.0	$	48.5
Net operating loss carryforward	68.0		74.8
Capital loss carryforward	6.3		9.4
Share-based compensation	46.5		39.8
Income tax credits	331.1		351.1
Property, plant and equipment	32.7		31.7
Accrued expenses	83.6		80.4
Intangible assets	1,581.5		1,694.8
Lease liabilities	37.1		20.2
Other	17.4		14.0
Gross deferred tax assets	2,250.2		2,364.7
Valuation allowances	(290.3)		(303.5)
Deferred tax assets, net of valuation allowances	1,959.9		2,061.2
Deferred tax liabilities:
Convertible debt	(53.9)		(228.7)
Intangible assets	(158.1)		(365.1)
ROU assets	(34.5)		(24.3)
Other	(8.1)		(13.1)
Deferred tax liabilities	(254.6)		(631.2)
Net deferred tax asset	$	1,705.3	$	1,430.0

Reported as:

Non-current deferred tax assets	$	1,749.2	$	1,748.5
Non-current deferred tax liability	(43.9)		(318.5)
Net deferred tax asset	$	1,705.3	$	1,430.0

In assessing whether it is more likely than not that deferred tax assets will be realized, the Company considers all available evidence, both positive and negative, including its recent cumulative earnings experience and expectations of future available taxable income of the appropriate character by taxing jurisdiction, tax attribute carryback and carryforward periods available for tax reporting purposes, and prudent and feasible tax planning strategies.


	Balance at Beginning of Year		Additions Charged to Costs and Expenses		Additions Charged to Other Accounts		Deductions		Balance at End of Year
Fiscal 2021	$	303.5	$	8.1	$	—	$	(21.3)	$	290.3
Fiscal 2020	$	332.1	$	26.0	$	—	$	(54.6)	$	303.5
Fiscal 2019	$	204.5	$	16.2	$	175.8	$	(64.4)	$	332.1

The Company had federal, state and foreign NOL carryforwards with an estimated tax effect of $68.0 million available at March 31, 2021. The federal, state and foreign NOL carryforwards expire at various times between fiscal 2022 and fiscal 2041, of which a portion of the NOL carryforwards do not expire. The Company had state tax credits of $163.0 million available at March 31, 2021. These state tax credits expire at various times between fiscal 2022 and fiscal 2041. The Company had capital loss carryforwards with an estimated tax effect of $6.3 million available at March 31, 2021. These capital loss carryforwards begin to expire in fiscal 2022. The Company had foreign tax credits of $1.9 million available at March 31, 2021. These foreign tax credits begin to expire in fiscal 2022. The Company had credits for increasing research activity in the amount of $85.0 million available at March 31, 2021. These credits begin to expire in fiscal 2022. The Company had U.S. prior year minimum tax credits in the amount of $4.7 million available at March 31, 2021. The Company had refundable tax credits in foreign

The Company recognizes interest and penalties related to unrecognized tax benefits through income tax expense. The Company is subject to income taxes in the U.S. and numerous foreign jurisdictions. The Company files U.S. federal, U.S. state, and foreign income tax returns. For U.S. federal, and in general for U.S. state tax returns, the fiscal 2007 and later tax years remain effectively open for examination by tax authorities. For foreign tax returns, the Company is generally no longer subject to income tax examinations for years prior to fiscal 2007.

Significant judgment is required in evaluating the Company's uncertain tax positions and determining its provision for income taxes. Although the Company believes that it has appropriately reserved for its uncertain tax positions, no assurance can be given that the final tax outcome of these matters will not be different than expectations. The Company will adjust these reserves in light of changing facts and circumstances, such as the closing of a tax audit, the refinement of an estimate, the closing of a statutory audit period or changes in applicable tax law. To the extent that the final tax outcome of these matters is different than the amounts recorded, such differences would impact the provision for income taxes in the period in which such determination is made. The provision for income taxes includes the impact of reserve provisions and changes to the reserves that are considered appropriate, as well as related net interest.

The Company recognizes liabilities for anticipated tax audit issues in the U.S. and other domestic and international tax jurisdictions based on its estimate of whether, and the extent to which, the tax positions are more likely than not to be sustained based on the technical merits. The Company believes that it has appropriate support for the income tax positions taken and to be taken on its tax returns and that its accruals for tax liabilities are adequate for all open years based on an assessment of many factors including past experience and interpretations of tax laws applied to the facts of each matter.

The Company believes it maintains appropriate reserves to offset any potential income tax liabilities that may arise upon final resolution of matters for open tax years. If such reserve amounts ultimately prove to be unnecessary, the resulting reversal of such reserves could result in tax benefits being recorded in the period the reserves are no longer deemed necessary. If such amounts prove to be less than an ultimate assessment, a future charge to expense would be recorded in the period in which the assessment is determined.


	Fiscal Year Ended March 31,
	2021		2020		2019
Beginning balance	$	757.3	$	763.4	$	436.0
Increases related to acquisitions	—		—		329.7
Decreases related to settlements with tax authorities	(6.0)		(1.2)		(8.3)
Decreases related to statute of limitation expirations	(10.9)		(30.9)		(16.2)
Increases related to current year tax positions	35.4		30.2		27.8
Increases (decreases) related to prior year tax positions	50.5		(4.2)		(5.6)
Ending balance	$	826.3	$	757.3	$	763.4

As of March 31, 2021 and March 31, 2020, the Company had accrued interest and penalties related to tax contingencies of $83.9 million and $74.6 million, respectively. Interest and penalties charged to operations during the fiscal year ended March 31, 2021 were $9.3 million. Previously accrued interest and penalties that were released during the fiscal years ended March 31, 2020 and March 31, 2019 were $13.5 million and $37.5 million, respectively.

The Company is currently under income tax examination in various tax jurisdictions in which it operates. The years under examination range from fiscal 2007 through fiscal 2019. In some jurisdictions, the Company has received tax assessments in excess of established reserves. The Company is contesting these tax assessments, and will continue to do so, including pursuing all available remedies such as appeals and litigation, if necessary. During fiscal 2021, additional assessments were received for these issues and the Company’s position remains unchanged.

In April 2020, the Company became aware of a withholding tax regulation that could be interpreted to apply to certain of its previous intra-group transactions. The Company evaluated whether the interpretation of this regulation could apply to its facts and circumstances, and, upon conclusion of its analysis, the Company established an immaterial reserve related to this matter during the fiscal year ended March 31, 2021.

In July 2015, in Altera Corp. v. Commissioner, the U.S. Tax Court issued an opinion related to the treatment of stock-based compensation expense in an intercompany cost-sharing arrangement. In the July 2015 ruling, the Tax Court concluded that the sharing of the cost of employee stock compensation in a company’s cost-sharing arrangement was invalid under the U.S. Administrative Procedures Act. In June 2019, a panel of the Ninth Circuit of the U.S. Court of Appeals reversed this decision. In July 2019, Altera petitioned the U.S. Court of Appeals for the Ninth Circuit to hold an en banc rehearing of the case. In November 2019, the en banc rehearing petition was denied, and Altera has asked the Supreme Court for a judicial review. In June 2020, the U.S. Supreme Court declined to issue a writ of certiorari in Altera v Commissioner, leaving intact the decision reached by the Ninth Circuit of the U.S. Court of Appeals. Based on the Ninth Circuit Opinion, the Company recorded a cumulative income tax expense of $23.3 million in fiscal 2021.