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Income Taxes | 12 Months Ended
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Jan. 03, 2015
Income Tax Disclosure [Abstract] |
INCOME TAXES | INCOME TAXES U.S. and foreign income from operations before income taxes are as follows (in thousands):
| January 3, 2015 |  | December 28, 2013 |  | December 29, 2012
United States | $ | 58,972 |  |  | $ | 174,470 |  |  | $ | 206,785 |
Foreign | 22,480 |  |  | (10,792 | ) |  | — |
Income from operations before income taxes | $ | 81,452 |  |  | $ | 163,678 |  |  | $ | 206,785 |
Income tax expense attributable to income from continuing operations before income taxes consists of the following (in thousands):
| January 3, 2015 |  | December 28, 2013 |  | December 29, 2012
Current: |  |  |  |  |
Federal | $ | 1,134 |  |  | $ | 8,109 |  |  | $ | 54,982 |
State | (884 | ) |  | 7,213 |  |  | 10,368 |
Foreign | 24,770 |  |  | 482 |  |  | 58 |
Total current | 25,020 |  |  | 15,804 |  |  | 65,408 |
Deferred: |  |  |  |  |  |  |
Federal | 886 |  |  | 40,396 |  |  | 10,015 |
State | 1,235 |  |  | 505 |  |  | 592 |
Foreign | (14,000 | ) |  | (1,994 | ) |  | — |
Total deferred | (11,879 | ) |  | 38,907 |  |  | 10,607 |
| $ | 13,141 |  |  | $ | 54,711 |  |  | $ | 76,015 |
Income tax expense for the years ended January 3, 2015, December 28, 2013 and December 29, 2012, differed from the amount computed by applying the statutory U.S. federal income tax rate to income from continuing operations before income taxes as a result of the following (in thousands):
| January 3, 2015 |  | December 28, 2013 |  | December 29, 2012
Computed "expected" tax expense | $ | 28,508 |  |  | $ | 57,287 |  |  | $ | 72,375 |
State income taxes, net of federal benefit | 228 |  |  | 5,017 |  |  | 7,124 |
Section 199 qualified domestic production deduction | — |  |  | (619 | ) |  | (4,830 | )
Change in valuation allowance | 5,420 |  |  | 507 |  |  | 254 |
Non-deductible compensation expenses | 1,622 |  |  | 106 |  |  | 253 |
Deferred tax on unremitted foreign earnings | 1,956 |  |  | — |  |  | — |
Sub-Part F income | 3,786 |  |  | — |  |  | — |
Foreign rate differential | (9,754 | ) |  | 694 |  |  | — |
Biofuel tax incentives | (22,546 | ) |  | (9,342 | ) |  | — |
Non-deductible transaction costs | 4,107 |  |  | 996 |  |  | — |
Other, net | (186 | ) |  | 65 |  |  | 839 |
| $ | 13,141 |  |  | $ | 54,711 |  |  | $ | 76,015 |
The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at January 3, 2015 and December 28, 2013 are presented below (in thousands):
| January 3, 2015 |  | December 28, 2013
Deferred tax assets: |  |  |
Loss contingency reserves | $ | 11,500 |  |  | $ | 10,756 |
Employee benefits | 11,866 |  |  | 9,749 |
Pension liability | 20,106 |  |  | 4,183 |
Intangible assets amortization, including taxable goodwill | 3,300 |  |  | 7,040 |
Net operating losses | 75,920 |  |  | 4,732 |
Inventory | 7,965 |  |  | 2,120 |
Other | 11,130 |  |  | 7,186 |
Total gross deferred tax assets | 141,787 |  |  | 45,766 |
Less valuation allowance | (18,037 | ) |  | (871 | )
Net deferred tax assets | 123,750 |  |  | 44,895 |
Deferred tax liabilities: |  |  |
Intangible assets amortization, including taxable goodwill | (189,877 | ) |  | (63,779 | )
Property, plant and equipment depreciation | (203,602 | ) |  | (67,535 | )
Investment in DGD Joint Venture | (41,040 | ) |  | (31,842 | )
Tax on unremitted foreign earnings | (47,870 | ) |  | — |
Other | (3,368 | ) |  | (3,209 | )
Total gross deferred tax liabilities | (485,757 | ) |  | (166,365 | )
Net deferred tax liability | $ | (362,007 | ) |  | $ | (121,470 | )
Amounts reported on Consolidated Balance Sheets: |  |  |
Current deferred tax asset | $ | 45,001 |  |  | $ | 17,289 |
Current deferred tax liability | (642 | ) |  | — |
Non-current deferred tax asset | 16,431 |  |  | — |
Non-current deferred tax liability | (422,797 | ) |  | (138,759 | )
Net deferred tax liability | $ | (362,007 | ) |  | $ | (121,470 | )
At January 3, 2015 and December 28, 2013, the Company had net deferred tax liabilities of approximately $362.0 million and $121.5 million, respectively. The increase in the deferred tax liability is principally due to deferred tax liabilities resulting from the carryover basis in the VION Acquisition, which was a stock acquisition. At January 3, 2015, the Company had net operating loss carryforwards for federal income tax purposes of approximately $82.4 million, which begin to expire in 2019. As a result of the change in ownership which occurred pursuant to the May 2002 recapitalization, utilization of approximately $4.9 million of the federal net operating loss carryforwards is limited to approximately $0.7 million per year for the remaining life of the net operating losses. The Company had approximately $48.5 million of net operating loss carryforwards for state income tax purposes, which begin to expire in 2015. Also at January 3, 2015, the Company had U.S. foreign tax credit carryforwards of approximately $0.9 million and state tax credit carryforwards of approximately $0.8 million. The Company had foreign net operating loss carryforwards of about $153.2 million, $55.1 million of which expire in 2015 through 2033 and $98.1 million of which can be carried forward indefinitely. As of January 3, 2015, the Company had a valuation allowance of $1.7 million due to uncertainties in respect to its ability to utilize its U.S. foreign tax credit carryforwards and U.S. state tax credit carryforwards before they expire. The Company also had a valuation allowance of $16.3 million due to uncertainties in its ability to utilize foreign net operating loss carryforwards and other foreign deferred tax assets. At January 3, 2015, the Company had unrecognized tax benefits of approximately $8.1 million. During the year, the Company's unrecognized tax benefits increased by $7.4 million primarily related to recording unrecognized tax benefits from the VION Acquisition and the TRS Transaction in purchase accounting. An indemnity receivable of $6.5 million has also been recorded in respect to the VION Acquisition. There was no material income statement activity in fiscal 2014 in respect to unrecognized tax benefits. All of the unrecognized tax benefits would favorably impact the Company's effective tax rate if recognized. The Company believes it is reasonably possible that unrecognized tax benefits could change by $2.2 million in the next twelve months. The possible change in unrecognized tax benefits relates to the expiration of certain statutes of limitation and the possible settlement of an ongoing income tax audit. The Company recognizes accrued interest and penalties, as appropriate, related to unrecognized tax benefits as a component of income tax expense. As of January 3, 2015, interest and penalties related to unrecognized tax benefits were $2.5 million. These interest and penalties related to the unrecognized tax benefits from the Vion Acquisition and were primarily recorded in purchase accounting. A reconciliation of the beginning and ending amounts of unrecognized tax benefits is as follows (in thousands):
| January 3, 2015 |  | December 28, 2013
Balance at beginning of Year | $ | 652 |  |  | $ | — |
Change in tax positions related to current year | — |  |  | 652 |
Change in tax positions related to prior years | 7,935 |  |  | — |
Expiration of the Statute of Limitations | (457 | ) |  | — |
Balance at end of year | $ | 8,130 |  |  | $ | 652 |
In fiscal 2014, the Company's major taxing jurisdictions are U.S. (federal and state), Belgium, Brazil, Canada, China, France, Germany and the Netherlands. The Company is subject to regular examination by various tax authorities and although the final outcome of these examinations is not yet determinable, the Company does not anticipate that any of the examinations will have a significant impact on the Company's results of operations or financial position. The statute of limitations for the Company's major jurisdictions is open for varying periods, but is generally closed through the 2005 tax year. Prior to fiscal 2014, the Company did not have significant operations outside of the U.S. During fiscal 2013, the Company began operations in Canada through the Rothsay Acquisition. During fiscal 2014, the Company began operations in the other major taxing jurisdictions through the VION Acquisition. The Company expects to indefinitely reinvest the earnings of its foreign subsidiaries outside the U.S. and has generally not provided deferred income taxes on the accumulated earnings of its foreign subsidiaries. At January 3, 2015, the amount of foreign subsidiary earnings indefinitely reinvested outside of the U.S. for which no deferred incomes taxes have been provided is not significant.

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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 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 2: 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 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph h -Article 4 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 Reference 6: 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 + Details
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