XML 27 R14.htm IDEA: XBRL DOCUMENT v3.5.0.2
INCOME TAXES
9 Months Ended
Jul. 31, 2016
INCOME TAXES [Abstract]  
INCOME TAXES
NOTE 7 - INCOME TAXES
 
The effective tax rate differs from the U.S. statutory rate of 35% in the three and nine month periods ended July 31, 2016 and August 2, 2015, primarily due to earnings being taxed at lower statutory rates in foreign jurisdictions, combined with the realization of certain tax benefits (as further noted below) in a foreign jurisdiction and the benefit of various investment credits in a foreign jurisdiction. Valuation allowances in jurisdictions with historic losses eliminated the effective rate impact of these jurisdictions.

As of July 31, 2016 and August 2, 2015, the Company determined that deferred tax assets of $2.5 million and $1.7 million, respectively, including $0.2 million within the three month period ended August 2, 2015, whose realization was previously not considered to be more likely than not, are realizable and, therefore, reduced their related valuation allowances. During the nine month period ended July 31, 2016, the Company realized a $2.4 million benefit, which resulted from the reversal of a previously recorded undistributed earnings tax liability in a foreign jurisdiction. As a result of a shareholder action to approve a dividend in this jurisdiction, the Company determined that it is no longer liable for this tax. In addition, during the nine month period ended July 31, 2016, $0.7 million of withholding tax was incurred upon the completion of a foreign subsidiary share redemption which commenced in fiscal year 2015.
 
Unrecognized tax benefits related to uncertain tax positions were $4.8 million at July 31, 2016, and $4.1 million at November 1, 2015, all of which would favorably impact the Company's effective tax rate if recognized. Accrued interest and penalties related to unrecognized tax benefits was $0.1 million at July 31, 2016 and November 1, 2015. As of July 31, 2016, the total amount of unrecognized tax benefits is not expected to significantly increase or decrease in the next twelve months.

PKLT, the Company's FPD manufacturing facility in Taiwan, has been accorded a tax holiday, which started in 2012 and expires in 2017. This tax holiday had no dollar or per share effect in the three and nine month periods ended July 31, 2016 and August 2, 2015. PDMC, the Company’s IC manufacturing facility in Taiwan was accorded a tax holiday that commenced in 2015 and expires in 2019. The Company realized tax benefits from this tax holiday of $0.1 million in the three month periods ended July 31, 2016 and August 2, 2015, and $0.3 million and $0.2 million in the respective nine month periods. The tax holiday had no per share effect in the three and nine month periods ended July 31, 2016 and August 2, 2015.