Taxes (Tables)

12 Months Ended

Apr. 01, 2023

Income Before Provision for Income Taxes

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


	Fiscal Years Ended
	April 1, 2023		April 2, 2022		March 27, 2021
United States	$	85	$	247	$	(56)
Non-United States	563		668		59
Total income before provision for income taxes	$	648	$	915	$	3

Provision for Income Taxes

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


	Fiscal Years Ended
	April 1, 2023			April 2, 2022			March 27, 2021
Current
United States - Federal	$	62		$	36		$	35
United States - State	22			16			20
Non-United States	46		(1)	98			81
Total current provision for income taxes	130			150			136
Deferred
United States - Federal	(40)			24		(2)	(37)
United States - State	(6)			7			(4)
Non-United States	(55)			(89)		(3)	(29)
Total deferred provision for income taxes	(101)			(58)			(70)
Total provision for income taxes	$	29		$	92		$	66

(1)Primarily relates to the remeasurement of an Asia income tax reserve.

(2)Reflects the impact of a United States tax accounting method change with respect to cost capitalization.

(3)Includes an Italian valuation allowance reversal during Fiscal 2022.

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

The Company’s provision for income taxes for the years ended April 1, 2023, April 2, 2022 and March 27, 2021 was different from the amount computed by applying the statutory U.K. income tax rates to the underlying income before provision for income taxes as a result of the following (amounts in millions):


	Fiscal Years Ended
	April 1, 2023					April 2, 2022				March 27, 2021
	Amount		% (1)			Amount		% (1)		Amount		% (1)
Provision for income taxes at the U.K. statutory tax rate	$	123	19.0	%		$	174	19.0	%	1		19.0	%
Effects of global financing arrangements (2)	(78)		(12.1)	%		(61)		(6.7)	%	(24)		(953.4)	%
Effect of changes in valuation allowances on deferred tax assets	(37)		(5.8)	%		(67)		(7.3)	%	24		955.7	%
Liability for uncertain tax positions	(3)		(0.4)	%		91		9.9	%	11		414.2	%
Differences in tax effects on foreign income	(1)		(0.2)	%		10		1.1	%	13		522.4	%
Non-deductible goodwill impairment	15		2.4	%	(3)	—		—	%	18		700.2	%	(3)
State and local income taxes, net of federal benefit	10		1.5	%		12		1.3	%	5		201.5	%
Share based compensation	6		0.9	%		3		0.4	%	6		247.7	%
Withholding tax	3		0.5	%		5		0.6	%	4		165.0	%
Brand tax basis step-up	—		—	%		(46)		(5.0)	%	—		—	%
CARES Act tax loss carryback	—		—	%		(43)		(4.6)	%	—		—	%
Tax rate change impact on deferred items	—		—	%		21		2.1	%	9		351.3	%

Other (4)	(9)		(1.3)	%		(7)		(0.7)	%	(1)		(33.1)	%
Effective tax rate	$	29	4.5	%		$	92	10.1	%	$	66	2,590.5	%

(1)Tax rates are calculated using unrounded numbers.

(2)Includes the tax related impacts of hedge terminations in conjunction with global financing arrangements.

(3)Attributable to goodwill impairment charges related to Jimmy Choo reporting units in Fiscal 2023 and Fiscal 2021.

(4)Primarily relates to individually immaterial United States 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
	April 1, 2023			April 2, 2022
Deferred tax assets
Operating lease liabilities	$	442		$	465
Net operating loss carryforwards	115			108
Accrued interest	70			20
Depreciation	61			53
Sales allowances	38			34
Inventories	21			26
Stock compensation	6			7
Payroll related accruals	3			3

Other	29			46
Total deferred tax assets	785			762
Valuation allowance	(52)		(1)	(92)		(2)
Net deferred tax assets	733			670

Deferred tax liabilities
Goodwill and intangibles	(420)			(449)		(3)
Operating lease right-of-use-assets	(339)			(340)
Derivative financial instruments	(186)			(73)


Total deferred tax liabilities	(945)			(862)
Net deferred tax liabilities	$	(212)		$	(192)

(1)Includes a U.K. valuation allowance reversal during Fiscal 2023.

(2)Includes an Italian valuation allowance reversal during Fiscal 2022.

(3)Includes a reversal of an Italian brand intangible deferred tax liability.

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 2023, Fiscal 2022 and Fiscal 2021, are presented below (in millions):


	Fiscal Years Ended
	April 1, 2023			April 2, 2022			March 27, 2021
Unrecognized tax benefits beginning balance	$	221		$	107		$	99
Additions related to prior period tax positions	12		(1)	105		(1)	12
Additions related to current period tax positions	14		(2)	29			9
Decreases related to audit settlements	(2)			(13)			(6)
Decreases in prior period positions due to lapses in statute of limitations	(3)			(3)			(4)
Decreases related to prior period tax positions	(42)		(3)	(4)			(3)
Unrecognized tax benefits ending balance	$	200		$	221		$	107

(1)Primarily relates to incremental reserves in North America and Europe.

(2)Primarily relates to North American and European tax reserves established in Fiscal 2023.

(3)Primarily relates to Asia tax reserves.