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1051 - Disclosure - Income Taxes (Tables)
(http://www.arrisgroup.com/taxonomy/role/NotesToFinancialStatementsIncomeTaxDisclosureTextBlockTables)
TableStatement [Table]
Slicers (applies to each fact value in each table cell)
Reporting Entity [Axis]0001645494 (http://www.sec.gov/CIK)
Legal Entity [Axis]Entity [Domain]
Statement [Line Items]Period [Axis]
2016-01-01 - 2016-12-31
Income (Loss) Before Income Taxes

Income (loss) before income taxes (in thousands):

 

     Years Ended December 31,  
     2016      2015      2014  

U.K

    $ (36,300 )     $ (5,321 )     $ (1,604 ) 

U.S

      (149,605 )       47,063        180,133  

Other Foreign

      209,997        65,311        60,701  
  

 

 

     

 

 

     

 

 

  
   $ 24,092      $ 107,053      $ 239,230  
  

 

 

     

 

 

     

 

 

  
  
Components of Income Tax Expense (Benefit)

Income tax expense (benefit) consisted of the following (in thousands):

 

     Years Ended December 31,  
     2016      2015      2014  

Current — U.K

    $ 81,822      $ 559      $ (94 ) 

          U.S.

      47,025        2,141        59,197  

          Other Foreign

      31,552        14,476        18,230  
  

 

 

     

 

 

     

 

 

  
     160,399        17,176        77,333  
  

 

 

     

 

 

     

 

 

  

Deferred — U.K.

      (23,177 )       (30 )       121  

            U.S.

      (105,735 )       5,119        (160,382 ) 

            Other Foreign

      (16,356 )       329        (5,053 ) 
  

 

 

     

 

 

     

 

 

  
     (145,268 )       5,418        (165,314 ) 
  

 

 

     

 

 

     

 

 

  

Income tax expense (benefit)

    $ 15,131      $ 22,594      $ (87,981 ) 
  

 

 

     

 

 

     

 

 

  

 

  
Reconciliation of U.S. Statutory Federal Income Tax Rate and Effective Income Tax Rate

A reconciliation of the U.K. statutory income tax rate of 20% for 2016 and the U.S. federal statutory income tax rate of 35% for 2015 and 2014 and the effective income tax rates is as follows:

 

     Years Ended December 31,  
     2016     2015     2014  

Statutory income tax rate

      20.0 %      35.0 %      35.0 % 

Effects of:

       

State income taxes, net of federal benefit

      (10.0 )      5.2       (6.6 ) 

Acquired deferred tax assets

      —       5.8       (16.5 ) 

U.S. domestic manufacturing deduction

      (12.0 )      (0.7 )      (2.1 ) 

Transaction costs

      22.0       —       —  

Research and development tax credits

      (90.6 )      (26.6 )      (8.7 ) 

Withholding taxes (U.K. entities)

      245.5       —       —  

U.K. stamp duty

      9.4       —       —  

Subpart F income

      4.0       4.8       0.8  

Changes in valuation allowance

      6.0       (26.6 )      (44.2 ) 

Foreign tax credits

      (14.0 )      (20.7 )      (0.6 ) 

Non-deductible officer compensation

      —       5.3       0.6  

Non-U.S. tax rate differential

      —       (5.0 )      (2.6 ) 

Non-U.K. tax rate differential

      (8.9 )      —       —  

Benefit of other foreign tax regimes

      (124.5 )      —       —  

Recapture of dual consolidated losses

      —       1.1       4.0  

Taiwan gain

      —       34.3       —  

Other, net

      15.9       9.2       4.1  
  

 

 

    

 

 

    

 

 

  
     62.8 %      21.1 %      (36.8 )% 
  

 

 

    

 

 

    

 

 

  

 

 

  
Significant Components of ARRIS' Net Deferred Income Tax Assets (Liabilities)

Significant components of ARRIS’ net deferred income tax assets (liabilities) were as follows (in thousands):

 

     December 31,  
     2016      2015  

Deferred income tax assets

      

Inventory costs

    $ 63,887      $ 28,728  

Accrued vacation

      7,062        7,138  

Acquisition charges

      —        6,556  

Allowance for bad debt

      7,611        4,396  

Equity compensation

      18,861        14,673  

Federal/state net operating loss carryforwards

      53,116        95,571  

Foreign net operating loss carryforwards

      14,409        10,989  

Research and development credits

      113,061        79,809  

Pension and deferred compensation

      15,933        19,166  

Warranty reserve

      36,693        18,215  

Capitalized interest

      24,963        —  

Capitalized research and development

      177,574        215,894  

Other

      71,500        24,214  
  

 

 

     

 

 

  

Total deferred income tax assets

      604,670        525,349  
  

 

 

     

 

 

  

Deferred income tax liabilities:

      

Other noncurrent liabilities

      (3,713 )       (4,394 ) 

Goodwill and intangible assets

      (467,957 )       (248,231 ) 
  

 

 

     

 

 

  

Total deferred income tax liabilities

      (471,670 )       (252,625 ) 
  

 

 

     

 

 

  

Net deferred income tax assets

      133,000        272,724  

Valuation allowance

      (57,772 )       (87,788 ) 
  

 

 

     

 

 

  

Net deferred income tax assets (liabilities)

    $ 75,228      $ 184,936  
  

 

 

     

 

 

  
  
Summary Deferred Tax Asset Valuation Allowance

An analysis of the deferred tax asset valuation allowances is as follows: (in thousands):

 

     2016      2015      2014  

Balance at beginning of fiscal year

    $ 87,788      $ 118,629      $ 163,745  

Additions

      17,973        3,312        37,708  

Deductions

      (47,989 )       (34,153 )       (82,824 ) 
  

 

 

     

 

 

     

 

 

  

Balance at end of fiscal year

    $ 57,772      $ 87,788      $ 118,629  
  

 

 

     

 

 

     

 

 

  
  
Tabular Reconciliation of Unrecognized Tax Benefits

Tabular Reconciliation of Unrecognized Tax Benefits (in thousands):

 

     For the Period ended December 31,  
     2016      2015      2014  

Beginning balance

    $ 49,919      $ 48,019      $ 28,344  

Gross increases — tax positions in prior period

      8,068        1,599        17,636  

Gross decreases — tax positions in prior period

      (5,700 )       (2,185 )       (4,115 ) 

Gross increases — current-period tax positions

      27,774        9,578        9,979  

Increases (decreases) from acquired businesses

      60,796        —        (196 ) 

Changes related to foreign currency translation adjustment and remeasurement

      (1,087 )       —        —  

Decreases relating to settlements with taxing authorities and other

      (3,933 )       (6,689 )       (2,480 ) 

Decreases due to lapse of statute of limitations

      (7,784 )       (403 )       (1,149 ) 
  

 

 

     

 

 

     

 

 

  

Ending balance

      128,053      $ 49,919      $ 48,019