XML 123 R23.htm IDEA: XBRL DOCUMENT
v3.19.3.a.u2

Income Taxes | 12 Months Ended
--- | ---
Dec. 28, 2019
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes The components of income before income taxes were taxed under the following jurisdictions:
(In thousands) |  | 2019 |  | 2018 |  | 2017
Domestic |  | $ | 112,812 |  |  | $ | 105,455 |  |  | $ | 76,876 |
Foreign |  | 53,271 |  |  | 44,962 |  |  | 50,096 |
Income before income taxes |  | $ | 166,083 |  |  | $ | 150,417 |  |  | $ | 126,972 |
Income tax expense consists of the following:
(In thousands) |  | 2019 |  | 2018 |  | 2017
Current tax expense: |  |  |  |  |  |
Federal |  | $ | 19,066 |  |  | $ | 17,974 |  |  | $ | 28,584 |
Foreign |  | 12,727 |  |  | 9,650 |  |  | 10,219 |
State and local |  | 3,892 |  |  | 3,158 |  |  | 2,241 |
Current tax expense |  | 35,685 |  |  | 30,782 |  |  | 41,044 |
Deferred tax (benefit) expense: |  |  |  |  |  |  |  |  |
Federal |  | 1,725 |  |  | (1,381 | ) |  | (1,764 | )
Foreign |  | (2,311 | ) |  | 551 |  |  | 1,118 |
State and local |  | 158 |  |  | 1,000 |  |  | (2,514 | )
Deferred tax (benefit) expense |  | (428 | ) |  | 170 |  |  | (3,160 | )
Income tax expense |  | $ | 35,257 |  |  | $ | 30,952 |  |  | $ | 37,884 |
The difference between the reported income tax expense and a tax determined by applying the applicable U.S. federal statutory income tax rate to income before income taxes is reconciled as follows:
(In thousands) |  | 2019 |  | 2018 |  | 2017
Expected income tax expense |  | $ | 34,892 |  |  | $ | 31,588 |  |  | $ | 44,440 |
State and local income tax, net of federal benefit |  | 3,234 |  |  | 3,495 |  |  | 1,135 |
Effect of foreign statutory rates different from U.S. and other foreign adjustments |  | (771 | ) |  | 759 |  |  | (6,026 | )
U.S. production activities deduction |  | — |  |  | — |  |  | (1,575 | )
Investment in unconsolidated affiliates |  | 538 |  |  | (2,776 | ) |  | 216 |
Benefit of stock-based compensation deductions |  | (36 | ) |  | (41 | ) |  | (2,160 | )
Effect of tax on accumulated foreign earnings |  | (111 | ) |  | (4,415 | ) |  | 12,893 |
Effect of tax rate change on net deferred tax liability balance |  | — |  |  | — |  |  | (12,067 | )
Other, net |  | (2,489 | ) |  | 2,342 |  |  | 1,028 |
Income tax expense |  | $ | 35,257 |  |  | $ | 30,952 |  |  | $ | 37,884 |
The Tax Cuts and Jobs Act (the Act) was enacted on December 22, 2017. The Act reduced the U.S. federal corporate income tax rate from 35 percent to 21 percent, required companies to pay a one-time transition tax on the accumulated earnings of certain foreign subsidiaries, and created new taxes on certain foreign-sourced earnings. The Company applied the guidance in Staff Accounting Bulletin No. 118 in accounting for the enactment date effects of the Act. At December 30, 2017, the Company made a reasonable estimate of the one-time transition tax on accumulated foreign earnings as well as the impact of the Act on its existing deferred tax balances. During the fourth quarter of 2018, the Company completed its accounting for all of the enactment-date income tax effects of the Act. The one-time transition tax is based on the Company’s total post-1986 earnings and profits (E&P) for which the accrual of U.S. income taxes had previously been deferred. The Company recorded a provisional amount for its one-time transition tax liability, resulting in an increase in income tax expense of $12.9 million, or 22 cents per diluted share, at December 30, 2017. During 2018, the Company continued to refine its calculation of the transition tax. Following the completion of this analysis, the Company recorded a reduction to income tax expense of $4.4 million, or eight cents per diluted share, to reduce this liability. During 2019, the Treasury Department finalized regulations related to the calculation of the transition tax, the impact of which was immaterial to the financial statements. The Company continues to assert that the undistributed earnings of most of its foreign subsidiaries are permanently reinvested. No taxes have been accrued with respect to these undistributed earnings or any outside basis differences. On December 30, 2017, the Company remeasured certain deferred tax assets and liabilities based on the rates at which they are expected to reverse in the future, which is generally 21 percent, resulting in an income tax benefit of $12.1 million, or 21 cents per diluted share. The Company has concluded that no further adjustment is needed related to this remeasurement. The global intangible low-taxed income (GILTI) provisions of the Act impose a tax on the GILTI earned by certain foreign subsidiaries. The FASB Staff Q&A, Topic 740, No. 5, Accounting for Global Intangible Low-Taxed Income, states that an entity can make an accounting policy election to either recognize deferred taxes for temporary basis differences expected to reverse as GILTI in future years or provide for the tax expense related to GILTI in the year the tax is incurred. The Company has elected to provide for the tax expense related to GILTI in the year the tax is incurred. The Company includes interest and penalties related to income tax matters as a component of income tax expense. The income tax expense related to penalties and interest was immaterial in 2019, 2018, and 2017. The statute of limitations is open for the Company’s federal tax return for 2015 and all subsequent years. The statutes of limitations for most state returns are open for 2016 and all subsequent years, and some state and foreign returns are also open for some earlier tax years due to differing statute periods. The Internal Revenue Service is currently auditing the Company’s 2015 and 2017 tax returns. While the Company believes that it is adequately reserved for possible audit adjustments, the final resolution of these examinations cannot be determined with certainty and could result in final settlements that differ from current estimates. The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities are presented below:
(In thousands) |  | 2019 |  | 2018
Deferred tax assets: |  |  |  |
Inventories |  | $ | 12,247 |  |  | $ | 12,297 |
Other postretirement benefits and accrued items |  | 9,271 |  |  | 9,213 |
Other reserves |  | 6,834 |  |  | 7,847 |
Foreign tax attributes |  | 5,909 |  |  | 6,252 |
State tax attributes, net of federal benefit |  | 22,395 |  |  | 27,651 |
Stock-based compensation |  | 3,378 |  |  | 2,949 |
Right of Use Liability |  | 5,965 |  |  | — |
Basis difference in unconsolidated affiliates |  | 6,547 |  |  | 1,067 |
Total deferred tax assets |  | 72,546 |  |  | 67,276 |
Less valuation allowance |  | (23,130 | ) |  | (25,311 | )
Deferred tax assets, net of valuation allowance |  | 49,416 |  |  | 41,965 |
Deferred tax liabilities: |  |  |  |  |  |
Property, plant, and equipment |  | 47,791 |  |  | 44,910 |
Pension |  | 949 |  |  | 250 |
Right of Use Asset |  | 5,967 |  |  | — |
Other Liabilities |  | 311 |  |  | — |
Total deferred tax liabilities |  | 55,018 |  |  | 45,160 |
Net deferred tax liabilities |  | $ | (5,602 | ) |  | $ | (3,195 | )
As of December 28, 2019, after consideration of the federal impact, the Company had state income tax credit carryforwards of $2.3 million, all of which expire by 2022, and other state income tax credit carryforwards of $11.7 million with unlimited lives. The Company had state net operating loss (NOL) carryforwards with potential tax benefits of $8.4 million, after consideration of the federal impact, expiring between 2020 and 2034. The state tax credit and NOL carryforwards are offset by valuation allowances totaling $10.7 million. As of December 28, 2019, the Company had other foreign tax attributes with potential tax benefits of $5.0 million that have an unlimited life. These attributes were offset by a valuation allowance totaling $3.0 million. The Company also had other foreign tax attributes of $0.9 million, which have limited lives expiring between 2025 and 2039. Income taxes paid were approximately $41.8 million in 2019, $38.1 million in 2018, and $42.5 million in 2017.

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