v3.25.1
Income Taxes
 12 Months Ended
Mar. 29, 2025
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
Taxes on Income
Domestic and foreign pretax income are as follows:
 Fiscal Years Ended
 March 29,
2025		March 30,
2024		April 1,
2023
(millions)
Domestic$117.7 $84.6 $74.3 
Foreign833.0 692.8 617.6 
Total income before income taxes$950.7 $777.4 $691.9 
Provisions for current and deferred income taxes are as follows:
 Fiscal Years Ended
 March 29,
2025		March 30,
2024		April 1,
2023
 (millions)
Current:
Federal$(54.4)$(17.6)$(35.7)
State and local(5.2)(15.9)1.4 
Foreign(198.2)(138.7)(131.0)
(257.8)(172.2)(165.3)
Deferred:
Federal37.0 2.8 14.3 
State and local(1.3)2.6 (8.0)
Foreign14.3 35.7 (10.2)
50.0 41.1 (3.9)
Total income tax provision$(207.8)$(131.1)$(169.2)
Tax Rate Reconciliation
The differences between income taxes expected at the U.S. federal statutory income tax rate and income taxes provided are as follows:
 Fiscal Years Ended
 March 29,
2025		March 30,
2024		April 1,
2023
 (millions)
Provision for income taxes at the U.S. federal statutory rate$(199.6)$(163.2)$(145.3)
Change due to:
State and local income taxes, net of federal benefit(5.6)(8.4)(6.3)
Foreign income taxed at different rates, net of U.S. foreign tax credits11.9 30.5 (2.7)
Deferred tax adjustments— 37.6 — 
Non-creditable foreign taxes7.2 (4.5)(8.8)
Changes in valuation allowance on deferred tax assets0.5 0.2 (0.2)
Unrecognized tax benefits and settlements of tax examinations(22.0)(21.1)(1.2)
Compensation-related adjustments(9.9)(7.1)(7.7)
Charitable contributions4.9 1.7 2.8 
Other4.8 3.2 0.2 
Total income tax provision$(207.8)$(131.1)$(169.2)
Effective tax rate(a)
21.9 %16.9 %24.5 %
(a)Effective tax rate is calculated by dividing the income tax provision by income before income taxes.
The Company's Fiscal 2025 effective tax rate was higher than the U.S. federal statutory income tax rate of 21% primarily due to uncertain tax positions and compensation-related adjustments, partially offset by a favorable tax adjustment related to the revaluation of a deferred tax liability on foreign earnings and the favorable tax impact of earnings generated in lower taxed foreign jurisdictions versus the U.S.
The Company's Fiscal 2024 effective tax rate was lower than the U.S. federal statutory income tax rate of 21% primarily due to deferred tax benefits recognized as a result of transactions entered into as part of a reorganization of the Company's legal entity structure, recently enacted changes in tax legislation, and the favorable tax impact of earnings generated in lower taxed
foreign jurisdictions versus the U.S., partially offset by an increase in income tax reserves. Additionally, the lower effective tax rate for Fiscal 2024 was also driven by favorable adjustments related to the revaluation of deferred tax assets arising from Swiss tax reform and favorable deferred tax adjustments related to the European Union's anti-tax avoidance directive.
The Company's Fiscal 2023 effective tax rate was higher than the U.S. federal statutory income tax rate of 21% primarily due to the unfavorable impact of certain foreign deferred adjustments, compensation-related adjustments, and state taxes.
Deferred Taxes
Significant components of the Company's deferred tax assets and liabilities are as follows:
 March 29,
2025		March 30,
2024
 (millions)
Lease liabilities$288.5 $300.0 
Goodwill and other intangible assets95.9 123.4 
Unrecognized tax benefits91.7 38.6 
Deferred compensation65.1 54.8 
Property and equipment52.5 48.5 
Receivable allowances and reserves33.3 27.1 
Capitalized software31.3 24.6 
Deferred income30.8 46.5 
Inventory basis difference27.6 31.2 
Net operating loss carryforwards8.8 9.7 
Accrued expenses8.4 7.2 
GILTI-related carryforwards0.7 3.4 
Lease ROU assets(226.8)(232.8)
Cumulative translation adjustment and hedges(21.4)(22.0)
Undistributed foreign income(7.4)(16.7)
Other12.2 6.5 
Valuation allowance(161.7)(168.7)
Net deferred tax assets(a)
$329.5 $281.3 
(a)Net deferred tax balances as of March 29, 2025 and March 30, 2024 were comprised of non-current deferred tax assets of $335.4 million and $288.3 million, respectively, recorded within deferred tax assets, and non-current deferred tax liabilities of $5.9 million and $7.0 million, respectively, recorded within other non-current liabilities in the consolidated balance sheets.
The Company has available state net operating loss carryforwards of $1.8 million (net of tax), for tax purposes to offset future taxable income. There are no federal or foreign net operating loss carryforwards available to the Company. The net operating loss carryforwards expire beginning in the Company's fiscal year ending April 3, 2032.
The Company also has available state and foreign net operating loss carryforwards of $5.4 million and $1.7 million (both net of tax), respectively, for which no net deferred tax asset has been recognized. A full valuation allowance has been recorded against these carryforwards since the Company does not believe that it will more likely than not be able to utilize these carryforwards to offset future taxable income. Subsequent recognition of these deferred tax assets would result in an income tax benefit in the year of such recognition. The valuation allowance relating to state net operating loss carryforwards remains consistent with prior year for jurisdictions where the Company will no longer be able to utilize the carryforwards in the future. The valuation allowance relating to foreign net operating loss carryforwards decreased by $0.5 million, mainly due to the write-off of related net operating losses in jurisdictions where the Company will no longer be able to utilize the carryforwards in the future.
In January 2018, new U.S. tax legislation commonly referred to as the Tax Cuts and Jobs Act (the "TCJA") became effective. The TCJA significantly revised U.S. tax law by, among other provisions, creating a territorial tax system that included a one-time mandatory transition tax on previously deferred foreign earnings. As a result of the taxation of undistributed foreign earnings in connection with the TCJA, the Company reevaluated its permanent reinvestment assertion and determined that undistributed foreign earnings that were subject to the TCJA's one-time mandatory transition tax were no longer considered to be permanently reinvested, effective December 31, 2017. The mandatory transition tax does not apply to undistributed foreign earnings generated after December 31, 2017. Accordingly, provision has not been made for U.S. or additional foreign taxes on approximately $3.717 billion of undistributed earnings of foreign subsidiaries generated after December 31, 2017, as such earnings are expected to be permanently reinvested. These earnings could become subject to tax if they were remitted as dividends, if foreign earnings were lent to RLC, a subsidiary or a U.S. affiliate of RLC, or if the stock of the subsidiaries were sold. Determination of the amount of unrecognized deferred tax liability with respect to such earnings is not practicable.
Uncertain Income Tax Benefits
Fiscal 2025, Fiscal 2024, and Fiscal 2023 Activity
Reconciliations of the beginning and ending amounts of unrecognized tax benefits, excluding interest and penalties, for Fiscal 2025, Fiscal 2024, and Fiscal 2023 are presented below:
 Fiscal Years Ended
 March 29,
2025		March 30,
2024		April 1,
2023
 (millions)
Unrecognized tax benefits beginning balance$98.4 $77.1 $75.4 
Additions related to current period tax positions32.5 21.7 13.3 
Additions related to prior period tax positions41.8 2.4 0.6 
Reductions related to prior period tax positions(0.6)(0.9)(4.3)
Reductions related to expiration of statutes of limitations(2.6)(1.0)(2.9)
Reductions related to settlements with taxing authorities— (0.1)(4.5)
Reductions related to foreign currency translation(0.4)(0.8)(0.5)
Unrecognized tax benefits ending balance$169.1 $98.4 $77.1 
The Company classifies interest and penalties related to unrecognized tax benefits as part of its provision for income taxes. Reconciliations of the beginning and ending amounts of accrued interest and penalties related to unrecognized tax benefits for Fiscal 2025, Fiscal 2024, and Fiscal 2023 are presented below:
 Fiscal Years Ended
 March 29,
2025		 March 30,
2024		April 1,
2023
 (millions)
Accrued interest and penalties beginning balance$20.3 $16.7 $16.5 
Net additions charged to expense4.1 3.9 2.6 
Reductions related to prior period tax positions(0.1)(0.2)(1.9)
Reductions related to settlements with taxing authorities— — (0.4)
Reductions related to foreign currency translation(0.1)(0.1)(0.1)
Accrued interest and penalties ending balance$24.2 $20.3 $16.7 
The total amount of unrecognized tax benefits, including interest and penalties, was $193.3 million and $118.7 million as of March 29, 2025 and March 30, 2024, respectively, and was included within the non-current liability for unrecognized tax benefits in the consolidated balance sheets. The total amount of unrecognized tax benefits that, if recognized, would affect the Company's effective tax rate was $101.6 million and $80.1 million as of March 29, 2025 and March 30, 2024, respectively.
On August 26, 2024, the U.S. Tax Court issued a decision in Varian Medical Systems, Inc. v. Commissioner related to the TCJA deduction for certain deemed foreign dividends otherwise subject to the transition tax on unrepatriated earnings of applicable foreign subsidiaries. Based on the Company's evaluation of the technical merits of this decision, during Fiscal 2025 it filed a protective refund claim with the Internal Revenue Service claiming a transition tax refund of $34.4 million, for which the Company recorded a corresponding deferred tax asset. However, as the Company believes it is more-likely-than-not that the intended refund claim will not be received, during Fiscal 2025 it also recorded an uncertain tax position reserve for the full refund claim of $34.4 million. Accordingly, on a net basis, this development had no resulting impact to the Company's effective tax rates or its consolidated statements of operations during Fiscal 2025.
Future Changes in Unrecognized Tax Benefits
The total amount of unrecognized tax benefits relating to the Company's tax positions is subject to change based on future events including, but not limited to, settlements of ongoing tax audits and assessments and the expiration of applicable statutes of limitations. Although the outcomes and timing of such events are highly uncertain, the Company does not anticipate that the balance of gross unrecognized tax benefits, excluding interest and penalties, will change significantly during the next twelve months. However, changes in the occurrence, expected outcomes, and timing of such events could cause the Company's current estimate to change materially in the future.
The Company files a consolidated U.S. federal income tax return, as well as tax returns in various state, local, and foreign jurisdictions. The Company is generally no longer subject to examinations by the relevant tax authorities for years prior to its fiscal year ended March 29, 2014.