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Income Taxes
3 Months Ended
Jun. 30, 2018
Income Tax Disclosure [Abstract]  
Income Taxes
12.

Income Taxes

For the three months ended June 30, 2018 and July 1, 2017, the Company recorded $3.4 million and $2.8 million of income tax expense and had an effective tax rate of 133.0% and 34.6%, respectively. The increase in the effective tax rate for the three months ended June 30, 2018, compared with the same period of 2017, was primarily due to costs related to the Exchange for which no tax benefit can be recognized.

The Company’s effective tax rate for the three months ended June 30, 2018 differs from the federal statutory income tax rate of 21.0%, due primarily to the effect of non-deductible expenses, state and local income taxes, one-time charges related to the Exchange and results in foreign jurisdictions and non-taxable entities. The Company’s effective tax rate for the three months ended July 1, 2017 differed from the federal statutory rate of 35% primarily due to the effect of non-deductible expenses, state and local income taxes and results in foreign jurisdictions and non-taxable entities.

The Company has not completed its accounting for the income tax effects of the Tax Cuts and Jobs Act (the “Act”) which was enacted on December 22, 2017. The Act reduces the U.S. federal corporate tax rate from 35% to 21%, requires companies to pay a one-time transition tax on all offshore earnings that were previously tax deferred and creates new taxes on certain foreign sourced earnings. As discussed in SEC Staff Accounting Bulletin No. 118, the accounting for the Tax Act should be completed within one year from the Tax Act enactment. During the three months ended June 30, 2018, the Company made no material adjustments to the provisional amounts recorded at March 31, 2018. Adjustments to the provisional amounts recorded at March 31, 2018 will be reflected upon the completion of the accounting for the Tax Act.

 

During the three months ended June 30, 2018, the Company’s uncertain tax positions decreased by $0.4 million due to expiration of certain statutes of limitations. The Company estimates that the expected change to the total amount of uncertain tax benefits in the next twelve months will be a decrease of $0.2 million due to expiration of certain statutes of limitations. The Company records interest and penalties related to uncertain tax positions as a component of income tax expense. Net interest expense for the periods presented herein is not significant.