Income Taxes (Tables)

12 Months Ended

Mar. 31, 2019

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

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



	Fiscal Years Ended March 31,
	2019		2018		2017
Domestic (U.S.)⁽¹⁾	$	95,639	$	141,582	$	(67	)
Foreign (Outside U.S.) ⁽¹⁾	74,792		45,485		9,875
Total⁽¹⁾	$	170,431	$	187,067	$	9,808

Schedule of the provision (benefit) for income tax expense

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



	Fiscal Years Ended March 31,
	2019			2018			2017
Current:
Federal	$	170		$	223		$	—
State and local	161			50			62
Foreign	9,966			8,295			4,247
Total current income tax expense from continuing operations	10,297			8,568			4,309
Deferred:
Federal	(43,804		)	(807		)	(6		)
State and local	(773		)	(96		)	(97		)
Foreign ⁽¹⁾	(5,180		)	1,467			88
Deferred tax expense (benefit) from continuing operations ⁽¹⁾	(49,757		)	564			(15		)
Provision for income tax expense (benefit) ⁽¹⁾	$	(39,460	)	$	9,132		$	4,294

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,
	2019			2018			2017
Amount computed using the statutory rate ⁽¹⁾	$	35,791		$	59,162		$	3,722
Change in U.S. valuation allowance	(67,761		)	(66,948		)	(7,080		)
Unremitted earnings of foreign subsidiaries	—			—			2,127
Effect of prior year adjustments ⁽²⁾	2,450			(1,337		)	1,789
IRC section 162(m) limitation ⁽³⁾	4,553			—			—
Expired foreign tax credits	—			407			4,766
Taxable foreign source income	3,502			22,238			1,835
(Put)/call option valuation impact	—			—			(3,745		)
Non-taxable gain from bargain purchase	—			(41,292		)	—
Deduction related to APA settlement	(2,309		)	—			—
Tax-deductible equity compensation	(4,215		)	(5,699		)	(44		)
Other non-deductible expenses	(44		)	220			(893		)
Differences due to U.S. tax law changes ⁽⁴⁾	—			50,420			—
State income taxes, net of federal taxes ⁽⁵⁾	(695		)	(3,325		)	(35		)
Change in foreign operations tax exposure reserves	132			1,059			108
Foreign tax rate differential	6,501			(400		)	587
Change in foreign tax law	(1,956		)	251			144
Change in foreign operations valuation allowance ⁽⁶⁾	(41,133		)	(6,676		)	983
Nondeductible expenses related to antitrust litigation	14,360			488			—
Other effect of foreign operations	11,364			564			30
Provision for income tax expense (benefit)	$	(39,460	)	$	9,132		$	4,294

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⁽¹⁾ The statutory income tax rate for the fiscal year ended March 31, 2017 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 31.6% 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. The statutory income tax rate for the fiscal year ended March 31, 2019 is 21%.

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

⁽³⁾Fiscal year ended March 31, 2019 difference consist of $1.5 million related to the expansion of the Sec. 162(m) limitation due to tax law changes.

⁽⁴⁾ Fiscal year end March 31, 2018 differences due to tax law changes consists of $4.8 million related to 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.

⁽⁵⁾ Fiscal year ended March 31, 2018 difference consists mainly of $3.7 million related to the revaluation of state net operating loss carryforwards as a result of the change in the federal tax rate.

⁽⁶⁾ The change in foreign operations valuation allowance excludes other comprehensive income and currency translation adjustments of $3.8 million, $(3.4) million, and $0.9 million for fiscal years ended 2019, 2018 and 2017, respectively, which has no impact on the provision for income taxes.

Schedule of the components of deferred tax assets and liabilities

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



Balance at March 31, 2018 ⁽¹⁾	$	(1,221	)
Deferred income taxes related to continuing operations	49,757
Deferred income taxes related to other comprehensive income	(223		)
Foreign currency translation	(95		)
Balance at March 31, 2019	$	48,218

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⁽¹⁾ March 31, 2018 adjusted due to the

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



	March 31,
	2019			2018
Deferred tax assets:
Net operating loss carry forwards	$	78,986		$	115,064
Sales allowances and inventory reserves	10,967			9,675
Medical and employee benefits	35,298			38,572
Depreciation and differences in basis	5,318			6,241
Accrued restructuring	469			2,551
Anti-trust fines and settlements	910			16,575
Tax credits	3,394			4,208
Stock-based compensation	5,589			1,765
Other⁽¹⁾	1,342			2,812
Total deferred tax assets before valuation allowance	142,273			197,463
Less valuation allowance	(58,658		)	(171,401		)
Total deferred tax assets	83,615			26,062
Deferred tax liabilities:
Unremitted earnings of subsidiaries	(21,850		)	(11,678		)
Amortization of intangibles and debt discounts	(11,996		)	(14,054		)
Non-amortized intangibles	(1,551		)	(1,551		)
Total deferred tax liabilities	(35,397		)	(27,283		)
Net deferred tax assets (liabilities)	$	48,218		$	(1,221	)

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⁽¹⁾

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, 2016	$	170,917
Charge (benefit) 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
Charge (benefit) to costs and expenses	(112,080		)
Deductions	(663		)
Balance at March 31, 2019	$	58,658

Schedule of tax credit carryforwards available

At March 31, 2019, 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, 2019, the Company had $7.7 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,
	2019			2018			2017
Beginning of fiscal year	$	8,680		$	7,390		$	7,103
Additions from business combinations	—			1,270			—
Additions for tax positions of the current year	2,027			1,078			762
Additions for tax positions of prior years	519			—			—
Reductions for tax positions of prior years	(633		)	(1,058		)	(64		)
Lapse in statute of limitations	(9		)	—			(411		)
Settlements	(2,923		)	—			—
End of fiscal year	$	7,661		$	8,680		$	7,390

Tax
Credits ($)

Fiscal Year
of Expiration

U.S. research credits

Texas franchise tax credits