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INCOME TAXES
6 Months Ended
Jun. 30, 2018
Income Tax Disclosure [Abstract]  
INCOME TAXES
INCOME TAXES
The Company’s effective tax rates for the three months ended June 30, 2018 and July 1, 2017 were 24.8% and 28.9%, respectively. The Company’s effective tax rates for the six months ended June 30, 2018 and July 1, 2017 were 20.4% and 34.4%, respectively. For the three months ended June 30, 2018, the decrease in the effective tax rate from the prior year period was primarily attributable to the net benefits of U.S. Tax Reform, partially offset with non-deductible transaction costs associated with the acquisition of MPI Research. For the six months ended June 30, 2018, the decrease in the effective tax rate from the prior year period was primarily attributable to the items previously mentioned, as well as the tax rate impact of the $18.0 million gain on the CDMO business divestiture in the first quarter of 2017.
For the three months ended June 30, 2018, the Company’s unrecognized tax benefits decreased by $1.2 million to $19.8 million, primarily due to settlement of prior period positions with tax authorities, offset with an additional quarter of Canadian Scientific Research and Experimental Development Credit reserves. For the three months ended June 30, 2018, the unrecognized income tax benefits that would impact the effective tax rate decreased by $1.4 million to $18.0 million, for the same reasons listed above. The accrued interest on unrecognized tax benefits was $2.7 million at June 30, 2018. The Company estimates that it is reasonably possible that the unrecognized tax benefits will decrease by up to $0.7 million over the next twelve-month period, primarily due to the outcome of pending tax audits.
The Company continues to monitor its accounting for the elements of U.S. Tax Reform enacted in December 2017. The Company has made reasonable estimates of the effects of U.S. Tax Reform to its consolidated financial statements based on guidance and regulations released by the Internal Revenue Service. The SEC has issued SAB 118, which allows for a measurement period through December 2018 to finalize the recording of the related tax impacts. The Company has not recorded any measurement period adjustments during the six months ended June 30, 2018 to the provisional amounts recorded in the fourth quarter of fiscal year 2017. The Company anticipates finalizing and recording any adjustments resulting from the release of any additional guidance and interpretations by the end of its fiscal year ending December 29, 2018.
The Company conducts business in a number of tax jurisdictions. As a result, it is subject to tax audits in jurisdictions including the U.S., U.K., China, France, Germany, and Canada. With few exceptions, the Company is no longer subject to U.S. and international income tax examinations for years before 2015.
The Company and certain of its subsidiaries have ongoing tax controversies with various tax authorities in the U.S., Canada, Germany, and France. The Company does not believe that resolution of these controversies will have a material impact on its financial position or results of operations.