Taxes (Tables)

12 Months Ended

Mar. 27, 2021

Income Before Provision for Income Taxes

Income (loss) before provision for income taxes consisted of the following (in millions):


	Fiscal Years Ended
	March 27, 2021		March 28, 2020		March 30, 2019
U.S.	$	(56)	$	(28)	$	191
Non-U.S.	59		(187)		430
Total income (loss) before provision for income taxes	$	3	$	(215)	$	621

Provision for Income Taxes

The provision for income taxes was as follows (in millions):


	Fiscal Years Ended
	March 27, 2021		March 28, 2020			March 30, 2019
Current
U.S. Federal	$	35	$	4	(2)	$	82	(1)
U.S. State	20		19			24
Non-U.S.	81		60			44
Total current	136		83			150
Deferred
U.S. Federal	(37)		(22)			(34)		(1)
U.S. State	(4)		(3)			(4)
Non-U.S.	(29)		(48)			(33)
Total deferred	(70)		(73)			(71)
Total provision for income taxes	$	66	$	10		$	79

(1)Includes a $25 million current tax provision and deferred tax benefit related to the U.S. Tax Act impact to business interest disallowance provisions.

(2)Includes a $35 million current tax benefit due to a release of income tax reserves in the U.S.

Significant Differences Between the Statutory Tax Rates and Company's Effective Tax Rate

The Company’s provision for income taxes for the years ended March 27, 2021, March 28, 2020 and March 30, 2019 was different from the amount computed by applying the statutory U.K. income tax rates to the underlying income (loss) from operations before income taxes as a result of the following (amounts in millions):


	Fiscal Years Ended
	March 27, 2021					March 28, 2020					March 30, 2019
	Amount		% (1)			Amount		% (1)			Amount		% (1)
Provision for income taxes at the U.K. statutory tax rate	$	1	19.0	%		$	(41)	19.0	%		$	118	19.0	%
Effects of global financing arrangements	(24)		(953.4)	%		(41)		21.7	%	(4)	(50)		(8.1)	%
Effect of changes in valuation allowances on deferred tax assets	24		955.7	%		67		(30.9)	%	(5)	11		2.8	%	(3)
Non-deductible goodwill impairment	18		700.2	%	(6)	32		(15.1)	%	(6)	—		—	%
Differences in tax effects on foreign income	13		522.4	%		(7)		1.2	%		(15)		(1.8)	%	(2)
Liability for uncertain tax positions	11		414.2	%		(12)		5.7	%		8		1.3	%
Tax rate change impact on deferred items	9		351.3	%		—		—	%		—		—	%
Share based compensation	6		247.7	%		9		(4.2)	%		(12)		(2.6)	%
State and local income taxes, net of federal benefit	5		201.5	%		4		(1.9)	%		6		0.9	%
Withholding tax	4		165.0	%		3		(1.6)	%		3		0.6	%
Transaction cost	—		—	%		—		—	%		9		1.5	%
Other	(1)		(33.1)	%	(7)	(4)		1.4	%		1		(0.9)	%
	$	66	2,590.5	%		$	10	(4.7)	%		$	79	12.7	%

(1)Tax rates are calculated using unrounded numbers.

(2)Mainly attributable to the United States statutory federal income tax rate change from a blended rate for Fiscal 2018 of 31.54% to 21% in Fiscal 2019.

(3)Includes an $11 million provision related to a United Kingdom capital loss.

(4)Mainly attributable to pre-tax loss position in Fiscal 2020.

(5)Mainly attributable to valuation allowances established on a portion of non-U.S. deferred tax assets.

(6)Attributable to goodwill impairment charges related to Jimmy Choo reporting units in Fiscal 2021 and Fiscal 2020.

(7)Primarily relates to individually immaterial U.S. and foreign permanent adjustments.

Significant Components of Deferred Tax Assets (Liabilities)

Significant components of the Company’s deferred tax assets (liabilities) consist of the following (in millions):


	Fiscal Years Ended
	March 27, 2021		March 28, 2020
Deferred tax assets
Operating lease liabilities	501		521
Net operating loss carryforwards	139		109
Depreciation	54		33
Sales allowances	50		37
Accrued Interest	44		40
Derivative Financial Instruments	32		—
Inventories	25		34
Stock compensation	12		13
Payroll related accruals	3		3
Other	42		—
Total deferred tax assets	902		790
Valuation allowance	(159)		(134)
Net deferred tax assets	743		656

Deferred tax liabilities
Goodwill and intangibles	(495)		(481)
Operating lease right-of-use-assets	(367)		(401)
Other	—		(14)

Total deferred tax liabilities	(862)		(896)
Net deferred tax liabilities	$	(119)	$	(240)

Reconciliation of Beginning and Ending Amounts of Unrecognized Tax Benefits Excluding Accrued Interest

A reconciliation of the beginning and ending amounts of unrecognized tax benefits, excluding accrued interest, for Fiscal 2021, Fiscal 2020 and Fiscal 2019, are presented below (in millions):


	Fiscal Years Ended
	March 27, 2021		March 28, 2020			March 30, 2019
Unrecognized tax benefits beginning balance	$	99	$	192		$	101
Additions related to prior period tax positions	12		29			81		(1)
Additions related to current period tax positions	9		4			21
Decreases in prior period positions due to lapses in statute of limitations	(4)		(3)			(1)
Decreases related to prior period tax positions	(3)		(99)		(2)	(3)
Decreases related to audit settlements	(6)		(24)		(3)	(7)
Unrecognized tax benefits ending balance	$	107	$	99		$	192

(1)Primarily relates to the Versace acquisition.

(2)Primarily relates to releases of North American and European tax reserves.

(3)Primarily relates to the effective settlement of a U.S. audit.