XML 81 R13.htm IDEA: XBRL DOCUMENT
v2.4.0.6

INCOME TAXES | 12 Months Ended
--- | ---
Dec. 31, 2011
INCOME TAXES |
| (6) | INCOME TAXES
Earnings before taxes is summarized as follows:
|  | 2011 |  |  | 2010 |  |  | 2009 |
|  | (dollars in thousands) |
Domestic |  | $ | 125,730 |  |  | $ | 104,421 |  |  | $ | 96,788 |
Foreign |  |  | 14,719 |  |  |  | 9,815 |  |  |  | 2,938 |
Total |  | $ | 140,449 |  |  | $ | 114,236 |  |  | $ | 99,726 |
The provision for income taxes is summarized as follows:
|  | 2011 |  |  | 2010 |  |  | 2009 |
|  | (dollars in thousands) |
Federal |  | $ | 33,778 |  |  | $ | 31,309 |  |  | $ | 31,359 |
State and local |  |  | 7,169 |  |  |  | 7,052 |  |  |  | 6,100 |
Foreign |  |  | 4,028 |  |  |  | 3,008 |  |  |  | 1,111 |
Total |  | $ | 44,975 |  |  | $ | 41,369 |  |  | $ | 38,570 |
Current |  | $ | 39,554 |  |  | $ | 39,949 |  |  | $ | 27,447 |
Deferred |  |  | 5,421 |  |  |  | 1,420 |  |  |  | 11,123 |
Total |  | $ | 44,975 |  |  | $ | 41,369 |  |  | $ | 38,570 |
Reconciliation of the differences between income taxes computed at the federal statutory rate to the effective rate are as follows:
|  | 2011 |  |  | 2010 |  |  | 2009 |
U.S. federal statutory tax rate |  |  | 35.0 | % |  |  | 35.0 | % |  |  | 35.0 | %
State taxes, net of federal benefit |  |  | 3.0 |  |  |  | 4.1 |  |  |  | 4.0 |
Tax reflief for U.S. manufacturers |  |  | (2.1 | ) |  |  | (1.9 | ) |  |  | (0.6 | )
Permanent book vs. tax differences |  |  | (1.1 | ) |  |  | (1.3 | ) |  |  | (1.7 | )
U.S. taxes on foreign earnings and foreign tax rate differentials |  |  | (1.5 | ) |  |  | (0.3 | ) |  |  | (0.7 | )
Reserve adjustments and other |  |  | (1.3 | ) |  |  | 0.6 |  |  |  | 2.7 |
Consolidated effective tax |  |  | 32.0 | % |  |  | 36.2 | % |  |  | 38.7 | %
At December 31, 2011 and January 1, 2011, the company had recorded the following deferred tax assets and liabilities, which were comprised of the following:
|  | 2011 |  |  | 2010 |
|  | (dollars in thousands) |
Deferred tax assets: |  |  |  |  |  |  |  |
Federal net operating loss carryforwards |  | $ | 20,430 |  |  | $ | 28,079 |
Compensation related |  |  | 18,654 |  |  |  | 12,474 |
Accrued retirement benefits |  |  | 8,780 |  |  |  | 5,228 |
Inventory reserves |  |  | 4,611 |  |  |  | 4,429 |
Product liability and workers compensation reserves |  |  | 5,052 |  |  |  | 4,295 |
Warranty reserves |  |  | 4,490 |  |  |  | 4,175 |
Receivable related reserves |  |  | 2,350 |  |  |  | 2,509 |
UNICAP |  |  | 2,138 |  |  |  | 1,984 |
Accrued plant closure |  |  | — |  |  |  | 868 |
State net operating loss carryforwards |  |  | 580 |  |  |  | 740 |
Interest rate swap |  |  | 1,114 |  |  |  | 676 |
Other |  |  | 10,802 |  |  |  | 8,805 |
Gross deferred tax assets |  |  | 79,001 |  |  |  | 74,262 |
Valuation allowance |  |  | — |  |  |  | — |
Deferred tax assets |  | $ | 79,001 |  |  | $ | 74,262 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Intangible assets |  | $ | (69,998 | ) |  | $ | (55,901 | )
Foreign tax earnings repatriation |  |  | (1,546 | ) |  |  | (2,266 | )
LIFO reserves |  |  | (161 | ) |  |  | (583 | )
Depreciation |  |  | (2,547 | ) |  |  | (497 | )
Other |  |  | (3,504 | ) |  |  | (1,353 | )
Deferred tax liabilities |  | $ | (77,756 | ) |  | $ | (60,600 | )
Net deferred tax assets (liabilities) |  | $ | 1,245 |  |  | $ | 13,662 |
Current deferred asset (liability) |  | $ | 39,090 |  |  | $ | 25,520 |
Long-term deferred asset (liability) |  |  | (37,845 | ) |  |  | (11,858 | )
Net deferred tax assets (liabilities) |  | $ | 1,245 |  |  | $ | 13,662 |
The company does not provide for deferred taxes and foreign withholding taxes on the remaining undistributed earnings of certain international subsidiaries of approximately $27.2 million and $10.0 million as of December 31, 2011 and January 1, 2011, respectively, as these earnings are considered permanently invested. Upon repatriation of these earnings to the U.S. in the form of dividends or otherwise, the company may be subject to U.S. income taxes and foreign withholding taxes. The actual U.S. tax cost would depend on income tax laws and circumstances at the time of distribution. Determination of the related tax liability is not practicable because of the complexities associated with the hypothetical calculation. As of December 31, 2011, the company has federal and state income tax net operating loss carryforwards of approximately $59.0 million which are subject to annual utilization limitations pursuant to Internal Revenue Code Section 382. If not utilized, the federal and state net operating loss carryforwards will expire at various dates beginning 2019 through 2028. Although the company believes its tax returns are correct, the final determination of tax examinations may be different than what was reported on the tax returns. In the opinion of management, adequate tax provisions have been made for the years subject to examination. The company is currently under examination by the Internal Revenue Service for the fiscal years ended January 3, 2009, January 2, 2010 and January 1, 2011. The completion dates of these examinations have not been determined as of December 31, 2011. As of December 31, 2011, the total amount of liability for unrecognized tax benefits related to federal, state and foreign taxes was approximately $15.6 million (of which $14.1 million would impact the effective tax rate if recognized) plus approximately $1.9 million of accrued interest and $2.0 million of penalties. The company recognizes interest and penalties accrued related to unrecognized tax benefits in income tax expense. Interest recognized in fiscal years 2011, 2010 and 2009 was $(0.3) million, $0.1 million and $0.7 million, respectively. Penalties recognized in fiscal years 2011, 2010 and 2009 was $(0.5) million, $0.2 million and $0.5 million, respectively. The following table summarizes the activity related to the unrecognized tax benefits for the fiscal years ended January 2, 2010, January 1, 2011 and December 31, 2011 (dollars in thousands):
Balance at January 3, 2009 |  | $ | 10,372 |
Increases to current year tax positions |  |  | 3,316 |
Increase to prior year tax positions |  |  | 7,474 |
Decrease to prior year tax positions |  |  | (911 | )
Balance at January 2, 2010 |  | $ | 20,251 |
Increases to current year tax positions |  |  | 3,524 |
Increase to prior year tax positions |  |  | 1,700 |
Decrease to prior year tax positions |  |  | (7,689 | )
Balance at January 1, 2011 |  | $ | 17,786 |
Increases to current year tax positions |  |  | 2,113 |
Increase to prior year tax positions |  |  | 334 |
Decrease to prior year tax positions |  |  | (2,393 | )
Settlements |  |  | (1,494 | )
Lapse of statute of limitations |  |  | (755 | )
Balance at December 31, 2011 |  | $ | 15,591 |
The company operates in multiple taxing jurisdictions; both within the United States and outside of the United States, and faces audits from various tax authorities. The company remains subject to examination until the statute of limitations expires for the respective tax jurisdiction. Within specific countries, the company and its operating subsidiaries may be subject to audit by various tax authorities and may be subject to different statute of limitations expiration dates. It is reasonably possible that the amounts of unrecognized tax benefits associated with state, federal and foreign tax positions may decrease over the next twelve months due to expiration of a statute or completion of an audit. The company believes that it is reasonably possible that approximately $3.7 million of its currently remaining unrecognized tax benefits may be recognized by the end of 2012 as a result of settlements with taxing authorities or lapses of statutes of limitations. A summary of the tax years that remain subject to examination in the company’s major tax jurisdictions are:
United States – federal | 2008 – 2011
United States – states | 2004 – 2011
Austrailia | 2011
Brazil | 2010 - 2011
Canada | 2009 – 2011
China | 2003 – 2011
Denmark | 2007 – 2011
France | 2011
Germany | 2011
Italy | 2009 – 2011
Mexico | 2006 – 2011
Philippines | 2007 – 2011
South Korea | 2006 – 2011
Spain | 2008 – 2011
Taiwan | 2008 – 2011
United Kingdom | 2008 – 2011

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://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 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 109 -Paragraph 136, 172 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 109 -Paragraph 43, 44, 45, 46, 47, 48, 49 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph h -Article 4 Reference 5: 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 6: 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 7: 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 8: 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=6881521&loc=d3e23780-122690 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration