Note 8 — Income Taxes

The components of income (loss) before income taxes by jurisdiction are as follows:


	Fiscal Years Ended
	March 31, 2016			April 3, 2015			April 4, 2014
	(In thousands)
United States	$	20,280		$	58,185		$	(31,850	)
Foreign		(2,683	)		(4,467	)		(2,754	)

	$	17,597		$	53,718		$	(34,604	)

The (benefit from) provision for income taxes includes the following:


	Fiscal Years Ended
	March 31, 2016			April 3, 2015			April 4, 2014
	(In thousands)
Current tax provision
Federal	$	132		$	(216	)	$	798
State		543			1,507			540
Foreign		148			115			12

		823			1,406			1,350

Deferred tax (benefit) provision
Federal		2,266			14,546			(11,188	)
State		(7,090	)		(1,477	)		(16,032	)
Foreign		(172	)		(648	)		(77	)

		(4,996	)		12,421			(27,297	)

Total (benefit from) provision for income taxes	$	(4,173	)	$	13,827		$	(25,947	)

Significant components of the Company’s net deferred tax assets are as follows:


	As of
	March 31, 2016			April 3, 2015
	(In thousands)
Deferred tax assets:
Net operating loss carryforwards	$	222,332		$	223,642
Tax credit carryforwards		129,333			112,183
Other		64,459			72,807
Valuation allowance		(17,089	)		(15,550	)

Total deferred tax assets		399,035			393,082
Deferred tax liabilities:
Intangible assets		(82,295	)		(66,340	)
Property, equipment and satellites		(182,030	)		(194,242	)

Total deferred tax liabilities		(264,325	)		(260,582	)

Net deferred tax assets	$	134,710		$	132,500

A reconciliation of the (benefit from) provision for income taxes to the amount computed by applying the statutory federal income tax rate to income before income taxes is as follows:


	Fiscal Years Ended
	March 31, 2016			April 3, 2015			April 4, 2014
	(In thousands)
Tax provision (benefit) at federal statutory rate	$	6,167		$	18,808		$	(12,132	)
State tax provision, net of federal benefit		1,197			4,014			(3,555	)
Tax credits, net of valuation allowance		(16,016	)		(14,055	)		(13,217	)
Non-deductible compensation		2,457			1,966			1,337
Non-deductible meals and entertainment		751			759			678
Stock-based compensation		551			478			232
Change in state effective tax rate		(354	)		508			(308	)
Foreign effective tax rate differential, net of valuation allowance		859			898			536
Other		215			451			482

Total (benefit from) provision for income taxes	$	(4,173	)	$	13,827		$	(25,947	)

As of March 31, 2016, the Company had federal and state research credit carryforwards of $96.7 million and $104.0 million, respectively, which begin to expire in fiscal year 2026 and fiscal year 2018, respectively. As of March 31, 2016, the Company had alternative minimum tax (AMT) and foreign tax credit (FTC) carryforwards of $0.4 million and $1.2 million, respectively. The AMT credit does not expire and the FTC begins to expire in fiscal year 2021. As of March 31, 2016, the Company had federal and state net operating loss carryforwards of $708.6 million and $585.5 million, respectively, which begin to expire in fiscal year 2020 and fiscal year 2016, respectively.

The Company recognizes excess tax benefits associated with share-based compensation to stockholders’ equity only when realized. When assessing whether excess tax benefits relating to share-based compensation have been realized, the Company follows the with-and-without approach excluding any indirect effects of the excess tax deductions. Under this approach, excess tax benefits related to share-based compensation are not deemed to be realized until after the utilization of all other tax benefits available to the Company. During fiscal year 2016, the Company did not realize any excess tax benefits. As of March 31, 2016, the Company had $52.9 million of unrealized excess tax benefits associated with share-based compensation. These tax benefits will be accounted for as a credit to additional paid-in capital if and when realized, rather than a reduction of the provision for income taxes.

In accordance with the authoritative guidance for income taxes (ASC 740), net deferred tax assets are reduced by a valuation allowance if, based on all the available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. Future realization of existing deferred tax assets ultimately depends on future profitability and the existence of sufficient taxable income of appropriate character (for example, ordinary income versus capital gains) within the carryforward period available under tax law. In the event that the Company’s estimate of taxable income is less than that required to utilize the full amount of any deferred tax asset, a valuation allowance is established which would cause a decrease to income in the period such determination is made. A valuation allowance of $17.1 million at March 31, 2016 and $15.6 million at April 3, 2015 has been established relating to state net operating loss carryforwards and research credit carryforwards that, based on management’s estimate of future taxable income attributable to certain states and generation of additional research credits, are considered more likely than not to expire unused.

The following table summarizes the activity related to the Company’s unrecognized tax benefits:


	As of
	March 31, 2016			April 3, 2015			April 4, 2014
	(In thousands)
Balance, beginning of fiscal year	$	41,769		$	37,395		$	34,491
(Decrease) increase related to prior year tax positions		(586	)		524			(249	)
Increases related to current year tax positions		3,897			3,897			4,459
Statute expirations		—			(47	)		(1,306	)

Balance, end of fiscal year	$	45,080		$	41,769		$	37,395

Of the total unrecognized tax benefits at March 31, 2016, $36.8 million would reduce the Company’s annual effective tax rate if recognized, subject to valuation allowance consideration.

In the next twelve months it is reasonably possible that the amount of unrecognized tax benefits will not change significantly.

The Company is subject to periodic audits by domestic and foreign tax authorities. By statute, the Company’s U.S. federal income tax returns are subject to examination by the Internal Revenue Service (“IRS”) for fiscal years 2013 through 2015. Additionally, tax credit carryovers that were generated in prior years and utilized in these years may also be subject to examination by the IRS. With few exceptions, fiscal years 2012 to 2015 remain open to examination by state and foreign taxing jurisdictions. The Company believes that it has appropriate support for the income tax positions taken on its tax returns and its accruals for tax liabilities are adequate for all open years based on an assessment of many factors, including past experience and interpretations. The Company’s policy is to recognize interest expense and penalties related to income tax matters as a component of income tax expense. There were no accrued interest or penalties associated with uncertain tax positions as of March 31, 2016 and April 3, 2015.