Income Taxes (Tables)

12 Months Ended

Mar. 31, 2016

Schedule of components of income (loss) before income taxes and equity loss from NEC TOKIN

The components of Income (loss) from continuing operations before income taxes and equity loss from NEC TOKIN are as follows (amounts in thousands):



	Fiscal Years Ended March 31,
	2016			2015			2014
Domestic (U.S.)	$	(38,581	)	$	(26,238	)	$	(89,529	)
Foreign (Outside U.S.)	7,364			14,112			33,232
Total	$	(31,217	)	$	(12,126	)	$	(56,297	)

Schedule of the provision (benefit) for income tax expense

The provision (benefit) for Income tax expense is as follows (amounts in thousands):



	Fiscal Years Ended March 31,
	2016			2015			2014
Current:
Federal	$	—		$	—		$	—
State and local	95			(92		)	35
Foreign	5,416			7,403			7,816
Total current income tax expense from continuing operations	5,511			7,311			7,851
Deferred:
Federal	(647		)	270			(1,694		)
State and local	172			39			406
Foreign	970			(2,393		)	(5,081		)
Deferred tax expense (benefit) from continuing operations	495			(2,084		)	(6,369		)
Provision for income taxes	$	6,006		$	5,227		$	1,482

Schedule of reconciliation of the statutory federal income tax rate to the effective income tax rate

Differences between the provision for income taxes on earnings from continuing operations and the amount computed using the U.S. Federal statutory income tax rate are as follows (amounts in thousands):



	Fiscal Years Ended March 31,
	2016		2015		2014
Amount computed using the statutory rate of 35%	(10,926	)	(4,245	)	(19,704	)
Change in U.S. valuation allowance	4,099		(19,691	)	21,788
Unremitted earnings of foreign subsidiaries	(231	)	18,502		—
Effect of prior year adjustments (1)	(286	)	5,766		(786	)
Effect of business combination	(648	)	—		—
Taxable foreign source income	2,415		4,660		3,392
Call option expiration	7,381		—		—
Other non-deductible expenses	126		217		149
State income taxes, net of federal taxes	267		(53	)	441
Change in foreign operations tax exposure reserves	998		1,119		773
Change in foreign tax law	981		—		—
Change in foreign operations valuation allowance (2)	(200	)	1,378		(2,733	)
Other effect of foreign operations	2,030		(2,426	)	(1,838	)
Provision for income taxes	6,006		5,227		1,482


(1)	The effect of prior year adjustments is offset by a full valuation allowance resulting in no impact on the provision for income taxes.


(2)	The change in foreign operations valuation allowance excludes other comprehensive income and currency translation adjustments of $0.6 million, $(3.4) million, and $1.0 million for fiscal years ended 2016, 2015 and 2014, respectively which has no impact on the provision for income taxes.

The foreign jurisdictions having the greatest effect on the provision for income taxes are China and Mexico. The statutory tax rates for China and Mexico are 25% and 30%, respectively. The provision for income taxes for China and Mexico for fiscal years ended 2016, 2015 and 2014 is $3.2 million, $6.4 million, and $2.2 million, respectively.

Schedule of annual activities included in the deferred tax valuation allowance

The following table presents the annual activities included in the deferred tax valuation allowance:



	Valuation Allowance for Deferred Tax Assets
Balance at March 31, 2013	$	169,270
Charge to costs and expenses	21,515
Deductions	(1,509		)
Balance at March 31, 2014	189,276
Charge to costs and expenses	(19,900		)
Deductions	(1,782		)
Balance at March 31, 2015	167,594
Charge to costs and expenses	4,072
Deductions	(749		)
Balance at March 31, 2016	$	170,917

Schedule of the components of deferred tax assets and liabilities

The components of deferred tax assets and liabilities are as follows (amounts in thousands):



	March 31,
	2016			2015
Deferred tax assets:
Net operating loss carry forwards	$	173,041		$	162,691
Sales allowances and inventory reserves	16,918			21,696
Medical and employee benefits	11,234			15,982
Tax credits	9,840			10,025
Stock-based compensation	2,576			3,578
Other	2,988			3,411
Total deferred tax assets before valuation allowance	216,597			217,383
Less valuation allowance	(170,917		)	(167,594		)
Total deferred tax assets	45,680			49,789
Deferred tax liabilities:
Unremitted earnings of subsidiaries	(18,271		)	(18,502		)
Depreciation and differences in basis	(11,718		)	(12,166		)
Amortization of intangibles and debt discounts	(7,107		)	(7,261		)
NEC TOKIN put/call option	—			(1,860		)
Non-amortized intangibles	(2,556		)	(2,556		)
Other	(451		)	(54		)
Total deferred tax liabilities	(40,103		)	(42,399		)
Net deferred tax assets	$	5,577		$	7,390

The change in net deferred income tax asset (liability) for the current year is presented below (amounts in thousands):



Balance at March 31, 2015	$	7,390
Deferred income taxes related to continuing operations	(495		)
Deferred income taxes resulting from business combination	(648		)
Deferred income taxes related to other comprehensive income	915
Foreign currency translation	(1,585		)
Balance at March 31, 2016	$	5,577

Schedule of tax credit carryforwards available

At March 31, 2016, the U.S. consolidated group of companies had the following tax credit carryforwards available (amounts in thousands):



	Tax Credits ($)	Fiscal Year of Expiration
U.S. foreign tax credits	5,173	2017
U.S. research credits	1,425	2023
Texas franchise tax credits	3,242	2026

Schedule of reconciliation of gross unrecognized tax benefits (excluding interest and penalties)

At March 31, 2016, the Company had $7.1 million of unrecognized tax benefits. A reconciliation of gross unrecognized tax benefits (excluding interest and penalties) is as follows (amounts in thousands):



	Fiscal Years Ended March 31,
	2016			2015			2014
Beginning of fiscal year	$	6,377		$	5,691		$	5,395
Additions for tax positions of the current year	763			1,115			639
Additions for tax positions of prior years	—			—			19
Reductions for tax positions of prior years	—			(56		)	(28		)
Lapse in statute of limitations	(10		)	(203		)	—
Settlements	(27		)	(170		)	(334		)
End of fiscal year	$	7,103		$	6,377		$	5,691