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INCOME TAXES | 12 Months Ended
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Dec. 30, 2023
Income Tax Disclosure [Abstract] |
INCOME TAXES | INCOME TAXES The components of income from operations before income taxes and the related provision for income taxes are presented below:
| Fiscal Year
| 2023 |  | 2022 |  | 2021
| (in thousands)
Income before income taxes: |  |  |  |  |
U.S. | $ | 185,667 |  |  | $ | 280,075 |  |  | $ | 129,598 |
Non-U.S. | 395,617 |  |  | 342,912 |  |  | 351,112 |
Total income before income taxes | $ | 581,284 |  |  | $ | 622,987 |  |  | $ | 480,710 |
Income tax provision (benefit): |  |  |  |  |
Current: |  |  |  |  |
Federal | $ | 49,090 |  |  | $ | 75,052 |  |  | $ | 32,728 |
Foreign | 85,356 |  |  | 68,644 |  |  | 60,197 |
State | 17,817 |  |  | 19,790 |  |  | 9,257 |
Total current | 152,263 |  |  | 163,486 |  |  | 102,182 |
Deferred: |  |  |  |  |
Federal | (42,987) |  |  | (27,230) |  |  | (27,486) |
Foreign | 779 |  |  | (1,134) |  |  | 13,891 |
State | (9,141) |  |  | (4,743) |  |  | (6,714) |
Total deferred | (51,349) |  |  | (33,107) |  |  | (20,309) |
Total provision for income taxes | $ | 100,914 |  |  | $ | 130,379 |  |  | $ | 81,873 |
Reconciliations of the statutory U.S. federal income tax rate to effective tax rates are as follows:
| Fiscal Year
| 2023 |  | 2022 |  | 2021
U.S. statutory income tax rate | 21.0 | % |  | 21.0 | % |  | 21.0 | %
Foreign tax rate differences | 1.5 |  |  | 0.4 |  |  | 0.1 |
State income taxes, net of federal tax benefit | 1.7 |  |  | 2.3 |  |  | 0.8 |
Non-deductible compensation | 0.8 |  |  | 0.9 |  |  | 1.2 |
Research tax credits and enhanced deductions | (5.0) |  |  | (3.8) |  |  | (5.0) |
Stock-based compensation | (0.1) |  |  | (1.4) |  |  | (4.3) |
Enacted tax rate changes | (0.1) |  |  | 0.4 |  |  | 3.0 |
Tax on unremitted earnings | 1.7 |  |  | 1.6 |  |  | 1.8 |
Impact of tax uncertainties | (0.3) |  |  | (1.3) |  |  | 0.7 |
Impact of acquisitions and restructuring | (4.2) |  |  | 2.0 |  |  | (1.6) |
Net operating loss deferred tax asset recognition, net of valuation allowance (NOL DTA) | 0.2 |  |  | (0.8) |  |  | — |
Global intangible low-taxed income | 1.5 |  |  | 0.8 |  |  | 1.3 |
Foreign-derived intangible income | (1.4) |  |  | (1.4) |  |  | (1.2) |
Other | 0.1 |  |  | 0.2 |  |  | (0.8) |
Effective income tax rate | 17.4 | % |  | 20.9 | % |  | 17.0 | %
The components of deferred tax assets and liabilities are as follows:
| December 30, 2023 |  | December 31, 2022
| (in thousands)
Deferred tax assets: |  |  |
Compensation | $ | 30,167 |  |  | $ | 26,341 |
Accruals and reserves | 19,121 |  |  | 16,938 |
Net operating loss and credit carryforwards | 379,959 |  |  | 382,932 |
Operating lease liability | 117,449 |  |  | 100,156 |
Capitalized R&D Expenditures | 35,673 |  |  | 18,616 |
Other | 12,190 |  |  | 8,516 |
Valuation allowance | (304,248) |  |  | (294,753) |
Total deferred tax assets | 290,311 |  |  | 258,746 |
Deferred tax liabilities: |  |  |
Goodwill and other intangibles | (231,020) |  |  | (256,234) |
Depreciation related | (57,791) |  |  | (48,965) |
Venture capital investments | (8,350) |  |  | (12,007) |
Tax on unremitted earnings | (25,080) |  |  | (16,407) |
Right-of-use assets | (102,620) |  |  | (91,716) |
Other | (16,520) |  |  | (7,737) |
Total deferred tax liabilities | (441,381) |  |  | (433,066) |
Net deferred taxes | $ | (151,070) |  |  | $ | (174,320) |
The Company has recognized its deferred tax assets on the belief that it is more likely than not that they will be realized. Exceptions primarily relate to deferred tax assets for net operating losses in Luxembourg, Sweden, state research and development tax credits, certain capital losses, and fixed assets in the U.K. A reconciliation of the Company’s beginning and ending valuation allowance are as follows:
| Fiscal Year
| 2023 |  | 2022 |  | 2021
Beginning balance | $ | 294,753 |  |  | $ | 315,645 |  |  | $ | 334,845 |
Additions (reductions) charged to income tax provision, net | 963 |  |  | 1,929 |  |  | 1,023 |
Additions due to acquisitions | — |  |  | — |  |  | 7,747 |
Reductions due to divestitures, restructuring | — |  |  | (5,337) |  |  | (4,706) |
Currency translation and other | 8,532 |  |  | (17,484) |  |  | (23,264) |
Ending balance | $ | 304,248 |  |  | $ | 294,753 |  |  | $ | 315,645 |
As of December 30, 2023, the Company had tax-effected deferred tax assets for net operating loss carryforwards of $336.0 million, as compared to $336.6 million as of December 31, 2022. Of this amount, $25.9 million are definite-lived and begin to expire in 2027, and the remainder of $310.1 million can be carried forward indefinitely. The Company has deferred tax assets for tax credit carryforwards of $41.5 million. The entire $41.5 million are definite-lived and begin to expire after 2039. Additionally, the Company records a benefit to operating income for research and development and other credits in Quebec, France, the Netherlands, and the U.K. related to its DSA facilities. A reconciliation of the Company’s beginning and ending unrecognized income tax benefits is as follows:
| Fiscal Year
| 2023 |  | 2022 |  | 2021
| (in thousands)
Beginning balance | $ | 23,242 |  |  | $ | 32,592 |  |  | $ | 24,970 |
Additions to tax positions for current year | 3,093 |  |  | 4,756 |  |  | 9,544 |
Additions to tax positions for prior years | 721 |  |  | 962 |  |  | 2,476 |
Reductions to tax positions for prior years | (4,058) |  |  | (1,420) |  |  | (1,330) |
Settlements | — |  |  | (10,514) |  |  | (1,870) |
Expiration of statute of limitations | (296) |  |  | (3,134) |  |  | (1,198) |
Ending balance | $ | 22,702 |  |  | $ | 23,242 |  |  | $ | 32,592 |
The $0.5 million decrease in unrecognized income tax benefits during fiscal year 2023 as compared to the corresponding period in 2022 is primarily attributable to prior year reductions to Canadian Scientific Research and Experimental Development (SR&ED) credits, partially offset by an additional year of SR&ED credit additions. The amount of unrecognized income tax benefits that, if recognized, would favorably impact the effective tax rate was $20.3 million as of December 30, 2023 and $20.3 million as of December 31, 2022. It is reasonably possible as of December 30, 2023 that the liability for unrecognized tax benefits for the uncertain tax position will decrease by approximately $5.2 million over the next twelve-month period. The Company continues to recognize interest and penalties related to unrecognized income tax benefits in income tax expense. The total amount of cumulative accrued interest related to unrecognized income tax benefits as of December 30, 2023 and December 31, 2022 was $1.3 million and $1.4 million, respectively. Interest expense recorded as a component of income taxes was immaterial for all periods. There were no accrued penalties related to unrecognized income tax benefits as of December 30, 2023 or as of December 31, 2022. The Company conducts business in a number of tax jurisdictions. As a result, it is subject to tax audits on a regular basis including, but not limited to, such major jurisdictions as the U.S., the 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 2019. The Company and certain of its subsidiaries have ongoing tax controversies in the U.S., Canada, France, and India. The Company does not anticipate resolution of these audits will have a material impact on its consolidated financial statements. Prepaid income tax of $59.7 million and $88.6 million has been presented within Other current assets in the accompanying consolidated balance sheets as of December 30, 2023 and December 31, 2022, respectively. Accrued income taxes of $38.8 million and $39.9 million have been presented within Other current liabilities in the accompanying consolidated balance sheets as of December 30, 2023 and December 31, 2022, respectively.

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