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INCOME TAXES | 12 Months Ended
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Jan. 03, 2016
Income Tax Disclosure [Abstract] |
INCOME TAXES | INCOME TAXES Income tax expense consists of the following:
|  | Successor |  | Predecessor
|  | Twelve Months Ended |  |  |  |  |  | Twelve Months Ended
|  | January 3, 2016 |  | December 28, 2014 |  | September 27 - December 29, 2013 |  | April 29 - September 26, 2013 |  | April 28, 2013
|  | (in millions)
Current income tax expense: |  |  |  |  |  |  |  |  |  |
Federal |  | $ | 113.0 |  |  | $ | 122.5 |  |  | $ | 0.2 |  |  | $ | 13.8 |  |  | $ | 39.8 |
State |  | 8.9 |  |  | 16.2 |  |  | 0.9 |  |  | 0.1 |  |  | 6.1 |
Foreign |  | 9.8 |  |  | 16.3 |  |  | 0.2 |  |  | 2.5 |  |  | 5.5 |
|  | 131.7 |  |  | 155.0 |  |  | 1.3 |  |  | 16.4 |  |  | 51.4 |
Deferred income tax expense (benefit): |  |  |  |  |  |  |  |  |  |  |  |  |
Federal |  | 66.8 |  |  | 43.6 |  |  | 7.4 |  |  | 7.1 |  |  | (2.6 | )
State |  | 8.6 |  |  | 26.4 |  |  | 1.7 |  |  | (11.4 | ) |  | (10.5 | )
Foreign |  | (11.5 | ) |  | (8.0 | ) |  | 5.4 |  |  | 0.6 |  |  | 7.8 |
|  | 63.9 |  |  | 62.0 |  |  | 14.5 |  |  | (3.7 | ) |  | (5.3 | )
Total income tax expense |  | $ | 195.6 |  |  | $ | 217.0 |  |  | $ | 15.8 |  |  | $ | 12.7 |  |  | $ | 46.1 |
A reconciliation of taxes computed at the federal statutory rate to the effective tax rate is as follows:
|  | Successor |  | Predecessor
|  | Twelve Months Ended |  |  |  |  |  | Twelve Months Ended
|  | January 3, 2016 |  | December 28, 2014 |  | September 27 - December 29, 2013 |  | April 29 - September 26, 2013 |  | April 28, 2013
Federal income taxes at statutory rate |  | 35.0 | % |  | 35.0 | % |  | 35.0 | % |  | 35.0 | % |  | 35.0 | %
State income taxes, net of federal tax benefit |  | 1.9 |  |  | 3.5 |  |  | 3.8 |  |  | (10.6 | ) |  | (0.2 | )
Foreign income taxes |  | (1.3 | ) |  | (3.4 | ) |  | 16.4 |  |  | 10.4 |  |  | (1.7 | )
Net change in uncertain tax positions |  | (0.1 | ) |  | — |  |  | (1.8 | ) |  | (1.3 | ) |  | 0.6 |
Net change in valuation allowance |  | — |  |  | (0.8 | ) |  | (20.1 | ) |  | (10.1 | ) |  | (4.8 | )
Tax credits |  | (1.9 | ) |  | (0.8 | ) |  | (4.5 | ) |  | (6.5 | ) |  | (5.7 | )
Manufacturer's deduction |  | (1.9 | ) |  | (1.6 | ) |  | (0.6 | ) |  | (0.2 | ) |  | (1.5 | )
Foreign restructuring |  | (1.6 | ) |  | (2.3 | ) |  | — |  |  | — |  |  | — |
Other |  | 0.1 |  |  | (1.5 | ) |  | 3.1 |  |  | 3.0 |  |  | (1.6 | )
Effective tax rate |  | 30.2 | % |  | 28.1 | % |  | 31.3 | % |  | 19.7 | % |  | 20.1 | %
We had income taxes receivable of $87.5 million and $64.4 million as of January 3, 2016 and December 28, 2014, respectively, in prepaid expenses and other current assets. Additionally, we had current taxes payable of $1.2 million as of December 28, 2014 in other current liabilities. The tax effects of temporary differences consist of the following:
|  | January 3, 2016 |  | December 28, 2014
|  | (in millions)
Deferred tax assets: |  |  |  |
Pension and other retirement liabilities |  | $ | 178.9 |  |  | $ | 222.3 |
Tax credits, carryforwards and net operating losses |  | 50.8 |  |  | 54.8 |
Accrued expenses and other current liabilities |  | 45.7 |  |  | 46.8 |
Derivatives |  | 10.6 |  |  | — |
Employee benefits |  | 25.4 |  |  | 24.8 |
Other |  | 30.7 |  |  | 26.8 |
|  | 342.1 |  |  | 375.5 |
Valuation allowance |  | (19.2 | ) |  | (34.9 | )
Total deferred tax assets |  | $ | 322.9 |  |  | $ | 340.6 |
Deferred tax liabilities: |  |  |  |
Property, plant and equipment |  | $ | 519.9 |  |  | $ | 508.6 |
Intangible assets |  | 451.0 |  |  | 434.2 |
Derivatives |  | — |  |  | 9.7 |
Investments in subsidiaries |  | 9.3 |  |  | 20.0 |
Total deferred tax liabilities |  | $ | 980.2 |  |  | $ | 972.5 |
The following table presents the classification of deferred taxes in our balance sheets as of January 3, 2016 and December 28, 2014:
|  | January 3, 2016 |  | December 28, 2014
|  | (in millions)
Prepaids and other current assets |  | $ | — |  |  | $ | 65.6 |
Other assets |  | 10.9 |  |  | — |
Deferred income taxes, net |  | 668.2 |  |  | 697.5 |
Management makes an assessment to determine if its deferred tax assets are more likely than not to be realized. Valuation allowances are established in the event that management believes the related tax benefits will not be realized. The valuation allowance primarily relates to state credits, state net operating loss carryforwards and losses in foreign jurisdictions for which no tax benefit was recognized. During 2015, the valuation allowance decreased $15.7 million which is primarily due to utilization of foreign losses and valuation allowance releases included in foreign restructuring. During 2014, the valuation allowance decreased by $7.4 million which is primarily due to foreign valuation allowance releases and expirations. The tax credits, carryforwards and net operating losses expire from 2016 to 2036. There were foreign subsidiary net earnings that were considered permanently reinvested of $198.5 million and $110.2 million as of January 3, 2016 and December 28, 2014, respectively. It is not reasonably determinable as to the amount of deferred tax liability that would need to be provided if such earnings were not reinvested. A reconciliation of the beginning and ending liability for unrecognized tax benefits is as follows:
|  | (in millions)
Balance, April 28, 2013 |  | $ | 15.7 |
Additions for tax positions taken in the current year |  | 1.6 |
Reduction for tax positions taken in prior years |  | (0.2 | )
Settlements with taxing authorities |  | (2.1 | )
Lapse of statute of limitations |  | (1.1 | )
Balance, December 29, 2013 |  | 13.9 |
Additions for tax positions taken in the current year |  | 2.4 |
Additions for tax positions taken in prior years |  | 0.4 |
Settlements with taxing authorities |  | (1.7 | )
Lapse of statute of limitations |  | (1.3 | )
Balance, December 28, 2014 |  | 13.7 |
Additions for tax positions taken in the current year |  | 2.4 |
Reductions for tax positions taken in prior years |  | (0.8 | )
Settlements with taxing authorities |  | (1.7 | )
Lapse of statute of limitations |  | (2.4 | )
Balance, January 3, 2016 |  | $ | 11.2 |
We operate in multiple taxing jurisdictions, both within the U.S. and outside of the U.S., and are subject to examination from various tax authorities. The liability for unrecognized tax benefits included $3.2 million and $4.9 million of accrued interest as of January 3, 2016 and December 28, 2014, respectively. We recognized $1.0 million of net interest income during 2015, $0.3 million of net interest expense during 2014, $0.5 million of net interest income during the eight months ended December 29, 2013 and $0.4 million of net interest expense during the twelve months ended April 28, 2013, respectively, in income tax expense. The liability for unrecognized tax benefits included $10.2 million as of January 3, 2016 and $13.0 million as of December 28, 2014, that if recognized, would impact the effective tax rate. We are currently being audited in several tax jurisdictions and remain subject to examination until the statute of limitations expires for the respective tax jurisdiction. Within specific countries, we may be subject to audit by various tax authorities, or subsidiaries operating within the country may be subject to different statute of limitations expiration dates. We have concluded all U.S. federal income tax matters through the tax year ended December 29, 2013. We are currently under U.S federal examination for the tax years ended December 28, 2014 and January 3, 2016. Based upon the expiration of statutes of limitations and/or the conclusion of tax examinations in several jurisdictions as of January 3, 2016, we believe it is reasonably possible that the total amount of previously unrecognized tax benefits may decrease by up to $3.0 million within twelve months of January 3, 2016. Beginning with the three months ended December 29, 2013, the Company, with its respective subsidiaries, is included in its U.S. parent company's consolidated federal income tax group and consolidated income tax return. The members of the consolidated group have elected to allocate income taxes among the members of the group by the separate return method, under which the parent company credits the subsidiary for income tax reductions resulting from the subsidiary's inclusion in the consolidated return, or the parent company charges the subsidiary for its allocated share of the consolidated income tax liability.

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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/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319 + Details
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