Income Taxes (Tables)

12 Months Ended

Feb. 01, 2020

Schedule of US and non US Components of Income Before Income Tax Expense (Benefit)

The U.S. and non-U.S. components of income (loss) from continuing operations before income taxes consist of the following (in thousands):


	Year Ended
	February 1, 2020		February 2, 2019		February 3, 2018
U.S. operations	$	(95,884)	$	666,508	$	24,377
Non-U.S. operations	894,267		(671,155)		426,827
	$	798,383	$	(4,647)	$	451,204

Schedule of Provision (Benefit) for Income Taxes

The provision (benefit) for income taxes consists of the following (in thousands):


	Year Ended
	February 1, 2020		February 2, 2019		February 3, 2018
Current income tax provision (benefit):
Federal	$	5,223	$	46,519	$	776
State	(1,937)		5,959		2
Foreign	(4,137)		3,322		(2,541)
Total current income tax provision (benefit)	(851)		55,800		(1,763)
Deferred income tax provision (benefit):
Federal	(125,892)		134,336		10,136
State	(9,382)		(6,567)		83
Foreign	(649,884)		(9,122)		9,606
Total deferred income tax provision (benefit)	(785,158)		118,647		19,825
Total provision (benefit) for income taxes	$	(786,009)	$	174,447	$	18,062

Reconciliation Between the Provision (Benefit) for Income Taxes at the Statutory Rate and the Effective Tax Rate

For purposes of the reconciliation between the provision (benefit) for income taxes at the statutory rate and the effective tax rate, a U.S. statutory tax rate of 21% for fiscal years 2020 and 2019, and a notional rate of 33.7% for fiscal 2018 is applied as follows:


	Year Ended
	February 1, 2020		February 2, 2019		February 3, 2018

Provision at U.S. statutory rate	$	167,660	$	(976)	$	152,134
State taxes, net of federal benefit	(9,878)		(9,652)		—
Difference in U.S. and non-U.S. tax rates	(181,625)		46,988		(137,419)
Foreign income inclusion in U.S.	13,736		167,093		—
Non-deductible compensation	6,196		13,215		—
Intellectual property transaction	(762,933)		93,777		—
Federal research and development credits	(42,604)		(29,503)		(21,620)
Uncertain tax positions	(3,913)		4,238		—
Change in valuation allowance	26,971		(110,921)		21,339
Other	381		188		3,628
Income tax provision (benefit)	$	(786,009)	$	174,447	$	18,062

Schedule of Deferred Tax Assets and Liabilities

Deferred tax assets consist of the following (in thousands):


	February 1, 2020		February 2, 2019
Deferred tax assets:
Net operating losses	$	105,925	$	134,598
Federal and California income tax credits	631,805		557,333
Intangible assets	632,537		—
Reserves and accruals	22,719		18,404
Share-based compensation	4,117		5,213
Lease liabilities	32,120		—
Gross deferred tax assets	1,429,223		715,548
Valuation allowance	(676,780)		(597,829)
Total deferred tax assets	752,443		117,719
Deferred tax liabilities:
Intangible assets	(69,771)		(185,973)
Fixed assets	(27,540)		(13,370)
Unremitted earnings of non-U.S. subsidiaries	(21,284)		(52,828)
Royalty income	—		(99,340)
Right of use assets	(25,290)		—
Total deferred tax liabilities	(143,885)		(351,511)
Net deferred tax assets (liabilities)	$	608,558	$	(233,792)

The deferred tax assets and liabilities based on tax jurisdictions are presented on our Consolidated Balance Sheet as follows:


	February 1, 2020		February 2, 2019
Non-current deferred tax assets	$	639,791	$	12,460
Non-current deferred tax liabilities	(31,233)		(246,252)
Net deferred tax assets (liabilities)	$	608,558	$	(233,792)

Unrecognized Tax Benefits Reconciliation

The following table reflects changes in the unrecognized tax benefits (in thousands):


	Year Ended
	February 1, 2020		February 2, 2019		February 3, 2018
Unrecognized tax benefits as of the beginning of the period	$	158,323	$	23,252	$	23,793
Increases related to acquired tax positions	9,215		131,631		—
Increases related to prior year tax positions	1,789		1,836		—
Decreases related to prior year tax positions	(6,747)		(6,259)		—
Increases related to current year tax positions	7,614		11,154		2,776

Settlements	(443)		—		—
Lapse in the statute of limitations	(4,044)		(3,198)		(3,341)
Foreign exchange (gain) loss	1,121		(93)		24
Gross amounts of unrecognized tax benefits as of the end of the period	$	166,828	$	158,323	$	23,252