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Income Taxes | 12 Months Ended
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Jan. 01, 2021
Income Tax Disclosure [Abstract] |
Income Taxes | INCOME TAXES Income before taxes and the provision (benefit) for taxes consisted of the following:
Fiscal Years | 2020 |  | 2019 |  | 2018
(In millions) |  |  |  |  |
Income before taxes: |  |  |  |  |
United States | $ | 24.7 |  |  | $ | 43.0 |  |  | $ | 25.4 |
Foreign | 370.3 |  |  | 301.8 |  |  | 252.6 |
Total | $ | 395.0 |  |  | 344.8 |  |  | 278.0 |
Provision (benefit) for taxes: |  |  |  |  |
U.S. Federal: |  |  |  |  |
Current | $ | (5.8) |  |  | $ | (3.8) |  |  | $ | (19.7) |
Deferred | (16.3) |  |  | 252.3 |  |  | (25.8) |
| (22.1) |  |  | 248.5 |  |  | (45.5) |
U.S. State: |  |  |  |  |
Current | 0.8 |  |  | 5.1 |  |  | 5.0 |
Deferred | 7.1 |  |  | (0.7) |  |  | (3.6) |
| 7.9 |  |  | 4.4 |  |  | 1.4 |
Foreign: |  |  |  |  |
Current | 62.2 |  |  | 49.2 |  |  | 57.0 |
Deferred | (43.6) |  |  | (471.8) |  |  | (18.2) |
| 18.6 |  |  | (422.6) |  |  | 38.8 |
Income tax provision (benefit) | $ | 4.4 |  |  | $ | (169.7) |  |  | $ | (5.3) |
Effective tax rate | 1.1 | % |  | (49.2) | % |  | (1.9) | %
The difference between the tax provision (benefit) at the statutory federal income tax rate and the tax provision (benefit) as a percentage of income before taxes ("effective tax rate") was as follows:
Fiscal Years | 2020 |  | 2019 |  | 2018
Statutory federal income tax rate | 21.0 | % |  | 21.0 | % |  | 21.0 | %
Increase (reduction) in tax rate resulting from: |  |  |  |  |
Foreign income taxed at different rates | 1.7 | % |  | (7.3) | % |  | (6.7) | %
Change in valuation allowance | 2.0 | % |  | — | % |  | — | %
U.S. State income taxes | 0.5 | % |  | 1.5 | % |  | 1.0 | %
Stock-based compensation | 1.5 | % |  | 1.2 | % |  | 1.1 | %
Excess tax benefit related to stock-based compensation | (1.5) | % |  | (2.4) | % |  | (3.2) | %
Effect of U.S. tax law change | — | % |  | — | % |  | (7.6) | %
Other U.S. taxes on foreign operations | (1.0) | % |  | 1.3 | % |  | 1.6 | %
U.S. Federal research and development credits | (2.3) | % |  | (2.8) | % |  | (3.7) | %
Tax reserve releases | (4.8) | % |  | (4.9) | % |  | (8.7) | %
Intellectual property restructuring and tax law changes | (16.2) | % |  | (59.8) | % |  | — | %
Other | 0.2 | % |  | 3.0 | % |  | 3.3 | %
Effective tax rate | 1.1 | % |  | (49.2) | % |  | (1.9) | %
The Coronavirus Aid, Relief, and Economic Security Act ("CARES Act"), enacted on March 27, 2020, provides tax relief to individuals and businesses in light of the impacts of COVID-19. It did not result in material adjustments to our income tax provision or to our net deferred tax assets as of the end of the fourth quarter of fiscal 2020. In December 2020, due to a change in the Netherlands tax law, the statutory tax rate was increased from 21.7% to 25.0%, effective January 1, 2021. As a result, we recorded a one-time tax benefit of $64.0 million due to the revaluation of the Netherlands deferred tax assets. In December 2019, to align with our international business operations, we completed a non-U.S. intercompany transfer of our intellectual property to a subsidiary in the Netherlands. The transaction resulted in deferred tax assets in the Netherlands and GILTI deferred tax liabilities in the U.S., recorded at the applicable statutory tax rates, resulting in a one-time income tax benefit of approximately $206.3 million in the fourth quarter of fiscal 2019. Deferred income taxes reflect the net effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The significant components of deferred tax assets and liabilities were as follows:
At the End of Fiscal Year | 2020 |  | 2019
(In millions) |  |  |
Deferred tax liabilities: |  |  |
Global intangible low-taxed income | $ | 219.7 |  |  | $ | 233.7 |
Purchased intangibles | 138.1 |  |  | 158.7 |
Operating lease right-of-use assets | 32.3 |  |  | 35.3 |
Other | 11.3 |  |  | 12.8 |
Total deferred tax liabilities | 401.4 |  |  | 440.5 |
Deferred tax assets: |  |  |
Depreciation and amortization | 497.1 |  |  | 471.5 |
Operating lease liabilities | 35.0 |  |  | 36.0 |
U.S. tax credit carryforwards | 32.8 |  |  | 34.2 |
Expenses not currently deductible | 32.3 |  |  | 28.0 |
Foreign net operating loss carryforwards | 16.8 |  |  | 16.2 |
Stock-based compensation | 10.6 |  |  | 13.3 |
U.S. net operating loss carryforwards | 7.4 |  |  | 9.8 |
Other | 20.6 |  |  | 14.1 |
Total deferred tax assets | 652.6 |  |  | 623.1 |
Valuation allowance | (41.3) |  |  | (25.3) |
Total deferred tax assets | 611.3 |  |  | 597.8 |
Total net deferred tax assets | $ | 209.9 |  |  | $ | 157.3 |
Reported as: |  |  |
Non-current deferred income tax assets | $ | 510.2 |  |  | $ | 475.5 |
Non-current deferred income tax liabilities | (300.3) |  |  | (318.2) |
Net deferred tax assets | $ | 209.9 |  |  | $ | 157.3 |
At the end of fiscal 2020, we have U.S. federal and foreign net operating loss carryforwards, or NOLs, of approximately $16.7 million and $83.4 million, respectively. The U.S. federal NOLs will begin to expire in 2026. There is generally no expiration for the foreign NOLs. Utilization of our U.S. federal and state NOLs is subject to annual limitations in accordance wit h the applicable tax code. We have determined that it is more likely than not that we will not realize a portion of the foreign NOLs and, accordingly, a valuation allowance has been established for such amount. We have U.S. federal and California research and development credit carryforwards of approximatel y $11.8 million and $33.1 million, respectively. The U.S. federal tax credit carryforwards will expire beginning 2040. The California research tax credits have an indefinite carryforward period. We believe that it is more likely than not that we will not r ealize a significant portion of the California research and development credit carryforwards and, accordingly, a valuation allowance has been established for such amount. As a result of the Tax Act, we can repatriate foreign earnings back to the U.S. when needed with minimal U.S. income tax consequences, other than the transition tax and GILTI tax. We reinvested a large portion of our undistributed foreign earnings in acquisitions and other investments and inte nd to bring back a portion of foreign cash that was subject to the transition tax and GILTI. During fiscal 2020, we repatriated $272.7 million of our foreign earnings to the U.S. The total amount of the unrecognized tax benefits at the end of fiscal 2020 was $64.1 million. A reconciliation of gross unrecognized tax benefit was as follows:
Fiscal Years | 2020 |  | 2019 |  | 2018
(In millions) |  |  |  |  |
Beginning balance | $ | 71.6 |  |  | $ | 69.1 |  |  | $ | 82.4 |
Increase related to current year tax positions | 8.0 |  |  | 12.6 |  |  | 10.0 |
(Decrease) increase related to prior years' tax positions | (0.4) |  |  | 3.8 |  |  | 4.5 |
Settlement with taxing authorities | (0.5) |  |  | (5.7) |  |  | (8.9) |
Lapse of statute of limitations | (14.6) |  |  | (8.2) |  |  | (18.9) |
Ending balance | $ | 64.1 |  |  | $ | 71.6 |  |  | $ | 69.1 |
Total unrecognized tax benefits that, if recognized, would affect our effective tax rate were $47.8 million and $59.5 million at the end of fiscal 2020 and 2019, respectively. We and our subsidiaries are subject to U.S. federal, state, and foreign income taxes. Our tax years are substantially closed for all U.S. federal and state income taxes for audit purposes through 2014. Non-U.S. income tax matters have been concluded for years through 2007. We are currently in various stages of multiple year examinations state, and foreign (multiple jurisdictions) taxing authorities. While we generally believe it is more likely than not that our tax positions will be sustained, it is reasonably possible that future obligations related to these matters could arise. We believe that our reserves are adequate to cover any potential assessments that may result from the examinations and negotiations. Although timing of the resolution and/or closure of audits is not certain, we do not believe that our gross unrecognized tax benefits would materially change in the next twelve months. Our practice is to recognize interest and/or penalties related to income tax matters in income tax expense. Our liability for unrecognized tax benefits including interest and penalties was recorded in Other non-current liabilities on our Consolidated Balance Sheets. At the end of fiscal 2020 and 2019, we accrued $9.6 million and $11.5 million, respectively, for interest and penalties.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI http://asc.fasb.org/extlink&oid=116825942&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI http://asc.fasb.org/extlink&oid=116825942&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 + Details
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