XML 46 R15.htm IDEA: XBRL DOCUMENT
v3.19.3.a.u2

Income Taxes | 12 Months Ended
--- | ---
Dec. 29, 2019
Income Tax Disclosure [Abstract] |
Income Taxes |
(7) | Income Taxes
Income before provision for income taxes in 2019, 2018 and 2017 consists of the following (in thousands):
|  | 2019 |  |  | 2018 |  |  | 2017 |
U.S. |  | $ | 468,467 |  |  | $ | 414,804 |  |  | $ | 386,989 |
Foreign |  |  | 14,170 |  |  |  | 13,874 |  |  |  | 13,164 |
Income before provision for income taxes |  | $ | 482,637 |  |  | $ | 428,678 |  |  | $ | 400,153 |
The differences between the U.S. Federal statutory income tax provision (using the statutory rate of 21% in 2019 and 2018 and the statutory rate of 35 % in 2017) and the Company’s consolidated provision for income taxes for 2019, 2018 and 2017 are summarized as follows (in thousands):
|  | 2019 |  |  | 2018 |  |  | 2017 |
Federal income tax provision based on the statutory rate |  | $ | 101,354 |  |  | $ | 90,022 |  |  | $ | 140,054 |
State and local income taxes, net of related Federal income taxes |  |  | 15,141 |  |  |  | 14,233 |  |  |  | 11,520 |
Non-resident withholding and foreign income taxes |  |  | 20,351 |  |  |  | 21,369 |  |  |  | 20,210 |
Foreign tax and other tax credits |  |  | (20,090 | ) |  |  | (25,301 | ) |  |  | (23,324 | )
Foreign derived intangible income |  |  | (12,810 | ) |  |  | (11,760 | ) |  |  | — |
Excess tax benefits from equity-based compensation |  |  | (25,735 | ) |  |  | (23,786 | ) |  |  | (27,227 | )
Non-deductible expenses, net |  |  | 3,090 |  |  |  | 1,999 |  |  |  | 1,794 |
Unrecognized tax provision (benefit), net of related Federal income taxes |  |  | 694 |  |  |  | 301 |  |  |  | (173 | )
Other |  |  | (67 | ) |  |  | (371 | ) |  |  | (606 | )
Provision for income taxes |  | $ | 81,928 |  |  | $ | 66,706 |  |  | $ | 122,248 |
Excess tax benefits or deficiencies from equity-based compensation activity resulted in a decrease in the Company’s provision for income taxes of $ 25.7 million in 2019, $ 23.8 million in 2018 and $ 27.2 million in 2017, primarily due to the recognition of excess tax benefits for options exercised and the vesting of equity awards. The components of the 2019, 2018 and 2017 consolidated provision for income taxes are as follows (in thousands):
|  | 2019 |  |  | 2018 |  |  | 2017 |
Provision for Federal income taxes |  |  |  |  |  |  |  |  |  |  |  |
Current provision |  | $ | 49,539 |  |  | $ | 33,558 |  |  | $ | 81,747 |
Deferred (benefit) provision |  |  | (2,862 | ) |  |  | (1,543 | ) |  |  | 6,732 |
Total provision for Federal income taxes |  |  | 46,677 |  |  |  | 32,015 |  |  |  | 88,479 |
Provision for state and local income taxes |  |  |  |  |  |  |  |  |  |  |  |
Current provision |  |  | 15,335 |  |  |  | 12,651 |  |  |  | 14,131 |
Deferred (benefit) provision |  |  | (435 | ) |  |  | 671 |  |  |  | (572 | )
Total provision for state and local income taxes |  |  | 14,900 |  |  |  | 13,322 |  |  |  | 13,559 |
Provision for non-resident withholding and foreign income taxes |  |  | 20,351 |  |  |  | 21,369 |  |  |  | 20,210 |
Provision for income taxes |  | $ | 81,928 |  |  | $ | 66,706 |  |  | $ | 122,248 |
As of December 29, 2019 and December 30, 2018, the significant components of net deferred income taxes are as follows (in thousands):
|  | 2019 |  |  | 2018 |
Deferred income tax assets |  |  |  |  |  |  |  |
Other accruals and reserves |  | $ | 11,874 |  |  | $ | 10,636 |
Insurance reserves |  |  | 11,256 |  |  |  | 10,253 |
Equity compensation |  |  | 10,357 |  |  |  | 9,705 |
Foreign tax credit |  |  | 9,333 |  |  |  | 4,600 |
Other |  |  | 6,980 |  |  |  | 6,029 |
Deferred income tax assets before valuation allowance |  |  | 49,800 |  |  |  | 41,223 |
Less: Valuation allowance |  |  | (4,280 | ) |  |  | — |
Total deferred income tax assets |  |  | 45,520 |  |  |  | 41,223 |
Deferred income tax liabilities |  |  |  |  |  |  |  |
Depreciation, amortization and asset basis differences |  |  | 8,117 |  |  |  | 10,505 |
Capitalized software |  |  | 27,330 |  |  |  | 25,192 |
Total deferred income tax liabilities |  |  | 35,447 |  |  |  | 35,697 |
Net deferred income tax assets |  | $ | 10,073 |  |  | $ | 5,526 |
Realization of the Company’s deferred tax assets is dependent upon many factors, including, but not limited to, the Company’s ability to generate sufficient taxable income. Although realization of the Company’s net deferred tax assets is not assured, on an ongoing basis, management assesses whether it remains more likely than not the net deferred tax assets will be realized. As of December 29, 2019, the Company had total foreign tax credits of $ 9.3 million, of which $ 5.6 million can be carried back one year to be fully utilized. As of December 29, 2019, the Company had a total valuation allowance of $ 4.3 million, related to expected limitations on foreign tax credits and interest deductibility in separately filed states. Management believes the remaining net deferred tax assets will be realized. For financial reporting purposes, the Company’s investment in foreign subsidiaries does not exceed its tax basis. Therefore, no deferred income taxes have been provided. The Company recognizes the financial statement benefit of a tax position if it is more likely than not that the position is sustainable, based solely on its technical merits and consideration of the relevant taxing authorities widely understood administrative practices and precedents. For tax positions meeting the “more likely than not” threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority. The Company recognizes accrued interest related to unrecognized tax benefits in interest expense and recognizes penalties in income tax expense. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands):
|  | 2019 |  |  | 2018 |  |  | 2017 |
Unrecognized tax benefits at beginning of period |  | $ | 1,964 |  |  | $ | 1,837 |  |  | $ | 1,954 |
Additions for tax positions of current year |  |  | 468 |  |  |  | 425 |  |  |  | 224 |
Additions for tax positions of prior years |  |  | 789 |  |  |  | 115 |  |  |  | 42 |
Reductions for changes in prior year tax positions |  |  | (284 | ) |  |  | (64 | ) |  |  | (10 | )
Reductions for lapses of applicable statute of limitations |  |  | (135 | ) |  |  | (349 | ) |  |  | (373 | )
Unrecognized tax benefits at end of period |  | $ | 2,802 |  |  | $ | 1,964 |  |  | $ | 1,837 |
As of December 29, 2019, the amount of unrecognized tax benefits was $ 2.8 million of which, if ultimately recognized, $ 2.2 million would be recognized as an income tax benefit and reduce the Company’s effective tax rate. As of December 29, 2019, the Company had $ 0.1 million of accrued interest and $ 0.2 million of accrued penalties. As of December 30, 2018, the amount of unrecognized tax benefits was $ 2.0 million of which, if ultimately recognized, $ 1.8 million would be recognized as an income tax benefit and reduce the Company’s effective tax rate. As of December 30, 2018, the Company had less than $ 0.1 million of accrued interest and no accrued penalties. During 2019, the Company completed an Internal Revenue Service (“IRS”) income tax audit for the 2015 tax year that did not result in any tax adjustments. There are no further IRS income tax audits scheduled. The Company continues to be under examination by certain states. The Company’s Federal statute of limitation has expired for years prior to 2016 (with the conclusion of the audit), but it varies for state and foreign locations. The Company believes appropriate provisions for all outstanding tax issues have been made for all jurisdictions and all open years. Tax Cuts and Jobs Act The Tax Cuts and Jobs Act (the “2017 Tax Act”), which was enacted on December 22, 2017, had a significant impact on the Company’s consolidated provision for income taxes for the years ended December 29, 2019 and December 30, 2018. The most significant impacts include but are not limited to reducing the U.S. corporate income tax rate from 35 percent to 21 percent, establishing a deduction for foreign derived intangible income and imposing new limitations on certain executive compensation and foreign tax credits.

X
- References No definition available. + Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration