Income Taxes

6 Months Ended

Jan. 01, 2022

Income Tax Disclosure [Abstract]

Income Taxes

Note 14. Income Taxes

The Company recorded an income tax expense of $2.3 million and $15.9 million for the three and six months ended January 1, 2022, respectively. The Company recorded an income tax expense of $12.5 million and $21.1 million for the three and six months ended January 2, 2021, respectively.

The income tax provision for the three and six months ended January 1, 2022 primarily relates to income tax in certain foreign and state jurisdictions based on the Company’s forecasted pre-tax income or loss and offset by a $8.1 million tax benefit recognized upon the statute of limitations on a transfer pricing reserve in a non-US jurisdiction. The income tax provision for the three and six months ended January 2, 2021 primarily relates to income tax in certain foreign and state jurisdictions based on the Company’s forecasted pre-tax income or loss.

The income tax provision recorded differs from the expected tax provision that would be calculated by applying the federal statutory rate to the Company’s income from continuing operations before taxes primarily due to the changes in valuation allowance for deferred tax assets attributable to the Company’s domestic and foreign income from continuing operations.

As of January 1, 2022, and July 3, 2021, the Company’s unrecognized tax benefits totaled $50.0 million and $55.5 million, respectively, and are included in deferred taxes and other non-current tax liabilities, net. The Company had $1.7 million accrued for the payment of interest and penalties as of January 1, 2022. The timing and resolution of income tax examinations is uncertain, and the amounts ultimately paid, if any, upon resolution of issues raised by the taxing authorities may differ from the amounts accrued for each year. Although the Company does not expect that our balance of gross unrecognized tax benefits will change materially in the next 12 months, given the uncertainty in the development of ongoing income tax examinations, the Company is unable to estimate the full range of possible adjustments to this balance.