Income Taxes (Tables)

12 Months Ended

Mar. 31, 2018

Schedule of components of income (loss) before income taxes and equity loss from NEC TOKIN

The components of Income (loss) before income taxes and equity income (loss) from equity method investments are as follows (amounts in thousands):



	Fiscal Years Ended March 31,
	2018		2017		2016
Domestic (U.S.)	$	141,632	$	653	$	(38,581	)
Foreign (Outside U.S.)	45,886		9,983		7,364
Total	$	187,518	$	10,636	$	(31,217	)

Schedule of the provision (benefit) for income tax expense

The provision (benefit) for Income tax expense is as follows (amounts in thousands):



	Fiscal Years Ended March 31,
	2018			2017			2016
Current:
Federal	$	223		$	—		$	—
State and local	50			62			95
Foreign	8,295			4,247			5,416
Total current income tax expense from continuing operations	8,568			4,309			5,511
Deferred:
Federal	(807		)	(6		)	(647		)
State and local	(96		)	(97		)	172
Foreign	1,516			84			970
Deferred tax expense (benefit) from continuing operations	613			(19		)	495
Provision for income taxes	$	9,181		$	4,290		$	6,006

Schedule of reconciliation of the statutory federal income tax rate to the effective income tax rate

Differences between the provision for income taxes on earnings from continuing operations and the amount computed using the U.S. Federal statutory income tax rate are as follows (amounts in thousands):



	Fiscal Years Ended March 31,
	2018			2017			2016
Amount computed using the statutory rate ⁽¹⁾	$	59,162		$	3,722		$	(10,926	)
Change in U.S. valuation allowance	(66,948		)	(7,080		)	4,099
Unremitted earnings of foreign subsidiaries	—			2,127			(231		)
Effect of prior year adjustments ⁽²⁾	(1,337		)	1,789			(286		)
Expired foreign tax credits	407			4,766			—
Effect of business combination	—			—			(648		)
Taxable foreign source income	22,238			1,835			2,415
(Put)/call option valuation impact	—			(3,745		)	7,381
Non-taxable gain from bargain purchase	(41,292		)	—			—
Tax-deductible equity compensation	(5,699		)	(44		)	—
Other non-deductible expenses	220			(893		)	126
Differences due to U.S. tax law changes ⁽³⁾	50,420			—			—
State income taxes, net of federal taxes ⁽⁴⁾	(3,325		)	(35		)	267
Change in foreign operations tax exposure reserves	1,059			108			998
Change in foreign tax law	251			144			981
Change in foreign operations valuation allowance ⁽⁵⁾	(6,676		)	983			(200		)
Other effect of foreign operations	701			613			2,030
Provision for income taxes	$	9,181		$	4,290		$	6,006

___________________________________________

⁽¹⁾ The statutory income tax rate for fiscal years ended March 31, 2017 and March 31, 2016 is 35%. The Tax Cuts and Jobs Act enacted on December 22, 2017 reduced the U.S. federal corporate tax rate from 35% to 21%, effective January 1, 2018. Based on the fiscal year of the Company ending on March 31, the statutory income tax rate for the fiscal year ended March 31, 2018 is a blended rate of 31.55% based on the number of days in the fiscal year before January 1, 2018 and the number of days in the fiscal after December 31, 2017.

⁽²⁾The effect of prior year adjustments is offset by a full valuation allowance resulting in no impact on the provision for income taxes.

⁽³⁾ Differences due to tax law changes consists of $4.8 million related foreign earnings and $45.6 million related to tax rate adjustment. $45.6 million related to tax rate adjustment is the gross deferred rate change, which is offset by valuation allowance adjustment, resulting in a net benefit of $0.8 million.

⁽⁴⁾ State net operating losses of $3.7 million resulted from the change in the federal tax rate.

⁽⁵⁾ The change in foreign operations valuation allowance excludes other comprehensive income and currency translation adjustments of ($3.4) million, $0.9 million, and $0.6 million for fiscal years ended 2018, 2017 and 2016, respectively, which has no impact on the provision for income taxes.

Schedule of the components of deferred tax assets and liabilities

The components of deferred tax assets and liabilities are as follows (amounts in thousands):



	March 31,
	2018			2017
Deferred tax assets:
Net operating loss carry forwards	$	115,064		$	165,161
Sales allowances and inventory reserves	9,675			14,910
Medical and employee benefits	38,572			16,336
Depreciation and differences in basis	6,241			—
Accrued restructuring	2,551			—
Anti-trust fines and settlements	16,575			—
Tax credits	4,208			4,954
Stock-based compensation	1,765			2,501
Other	3,299			2,357
Total deferred tax assets before valuation allowance	197,950			206,219
Less valuation allowance	(171,401		)	(163,898		)
Total deferred tax assets	26,549			42,321
Deferred tax liabilities:
Unremitted earnings of subsidiaries	(11,678		)	(20,265		)
Depreciation and differences in basis	—			(7,802		)
Amortization of intangibles and debt discounts	(14,054		)	(6,207		)
Non-amortized intangibles ⁽¹⁾	(1,551		)	(2,549		)
Other	—			(501		)
Total deferred tax liabilities	(27,283		)	(37,324		)
Net deferred tax assets (liabilities)	$	(734	)	$	4,997

__________________________________________________________________

¹⁾ March 31, 2017 adjusted due to the adoption of ASU No. 2016-16

The change in net deferred income tax asset (liability) for the current year is presented below (amounts in thousands):



Balance at March 31, 2017 ⁽¹⁾	$	4,997
Deferred income taxes resulting from business combination	(5,452		)
Deferred income taxes related to continuing operations	(614		)
Deferred income taxes related to other comprehensive income	2
Foreign currency translation	333
Balance at March 31, 2018	$	(734	)

___________________________________________________________

¹⁾ March 31, 2017 adjusted due to the adoption of ASU No. 2016-16

Schedule of annual activities included in the deferred tax valuation allowance

The following table presents the annual activities included in the deferred tax valuation allowance (amounts in thousands):



	Valuation Allowance for Deferred Tax Assets
Balance at March 31, 2015	$	167,594
Charge to costs and expenses	4,072
Deductions	(749		)
Balance at March 31, 2016	170,917
Charge to costs and expenses	(2,094		)
Deductions	(4,925		)
Balance at March 31, 2017	163,898
Charge to costs and expenses	8,647
Deductions	(1,144		)
Balance at March 31, 2018	$	171,401

Schedule of tax credit carryforwards available

At March 31, 2018, the U.S. consolidated group of companies had the following tax credit carryforwards available (amounts in thousands):

Schedule of reconciliation of gross unrecognized tax benefits (excluding interest and penalties)

At March 31, 2018, the Company had $8.7 million of unrecognized tax benefits. A reconciliation of gross unrecognized tax benefits (excluding interest and penalties) is as follows (amounts in thousands):



	Fiscal Years Ended March 31,
	2018			2017			2016
Beginning of fiscal year	$	7,390		$	7,103		$	6,377
Additions from business combinations	1,270			—			—
Additions for tax positions of the current year	1,078			762			763
Reductions for tax positions of prior years	(1,058		)	(64		)	—
Lapse in statute of limitations	—			(411		)	(10		)
Settlements	—			—			(27		)
End of fiscal year	$	8,680		$	7,390		$	7,103

Tax
Credits ($)

Fiscal Year
of Expiration

U.S. research credits

Texas franchise tax credits