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Income Taxes | 12 Months Ended
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Dec. 30, 2017
Income Tax Disclosure [Abstract] |
Income Taxes | INCOME TAXES The geographic components of earnings (loss) before income taxes are as follows:
| Fiscal Year
(In millions) | 2017 |  | 2016 |  | 2015
United States | $ | (78.2 | ) |  | $ | 54.7 |  |  | $ | 102.1 |
Foreign | 67.6 |  |  | 55.8 |  |  | 62.5 |
Earnings (loss) before income taxes | $ | (10.6 | ) |  | $ | 110.5 |  |  | $ | 164.6 |
The provisions for income tax expense (benefit) consist of the following:
| Fiscal Year
(In millions) | 2017 |  | 2016 |  | 2015
Current expense: |  |  |  |  |
Federal | $ | 48.1 |  |  | $ | 16.0 |  |  | $ | 48.9 |
State | 1.9 |  |  | 1.4 |  |  | 5.2 |
Foreign | 14.0 |  |  | 11.3 |  |  | 11.6 |
Deferred expense (credit): |  |  |  |  |
Federal | (72.0 | ) |  | (6.9 | ) |  | (22.0 | )
State | (0.2 | ) |  | (0.3 | ) |  | (1.9 | )
Foreign | (1.7 | ) |  | 1.5 |  |  | (0.4 | )
Income tax provision | $ | (9.9 | ) |  | $ | 23.0 |  |  | $ | 41.4 |
A reconciliation of the Company’s total income tax expense and the amount computed by applying the statutory federal income tax rate of 35% to earnings before income taxes is as follows:
| Fiscal Year
(In millions) | 2017 |  | 2016 |  | 2015
Income taxes at U.S. statutory rate (35%) | $ | (3.7 | ) |  | $ | 38.7 |  |  | $ | 57.6 |
State income taxes, net of federal income tax | (4.2 | ) |  | (6.1 | ) |  | 1.8 |
(Nontaxable earnings) non-deductible losses of foreign affiliates: |  |  |  |  |
Cayman Islands | (3.5 | ) |  | (0.4 | ) |  | (0.4 | )
Other | (0.3 | ) |  | 0.2 |  |  | (1.9 | )
Foreign earnings taxed at rates different from the U.S. statutory rate: |  |  |  |  |
Hong Kong | (17.3 | ) |  | (17.3 | ) |  | (18.1 | )
Other | 3.5 |  |  | 3.3 |  |  | 0.2 |
Adjustments for uncertain tax positions | 0.4 |  |  | 0.2 |  |  | 0.1 |
Change in valuation allowance | 3.0 |  |  | 2.0 |  |  | (1.3 | )
Change in state tax rates | 0.1 |  |  | (0.1 | ) |  | (0.7 | )
Transition tax due to TCJA | 58.1 |  |  | — |  |  | — |
Remeasurement of U.S. deferred taxes due to TCJA | (52.5 | ) |  | — |  |  | — |
Deferred tax on future cash dividends | 3.0 |  |  | — |  |  | — |
Non-deductible expenses | (0.6 | ) |  | 1.9 |  |  | 3.5 |
Other | 4.1 |  |  | 0.6 |  |  | 0.6 |
Income tax provision | $ | (9.9 | ) |  | $ | 23.0 |  |  | $ | 41.4 |
Significant components of the Company’s deferred income tax assets and liabilities are as follows:
(In millions) | December 30, 2017 |  | December 31, 2016
Deferred income tax assets: |  |  |
Accounts receivable and inventory valuation allowances | $ | 5.9 |  |  | $ | 17.2 |
Deferred compensation accruals | 8.9 |  |  | 9.0 |
Accrued pension expense | 33.9 |  |  | 53.7 |
Stock-based compensation | 16.7 |  |  | 22.6 |
Net operating loss and foreign tax credit carryforwards | 15.1 |  |  | 9.7 |
Book over tax depreciation and amortization | — |  |  | 2.0 |
Tenant lease expenses | 3.2 |  |  | 5.0 |
Environmental reserve | 7.9 |  |  | — |
Other | 10.4 |  |  | 9.3 |
Total gross deferred income tax assets | 102.0 |  |  | 128.5 |
Less valuation allowance | (14.5 | ) |  | (11.5 | )
Net deferred income tax assets | 87.5 |  |  | 117.0 |
Deferred income tax liabilities: |  |  |
Intangible assets | (155.3 | ) |  | (270.5 | )
Tax over book depreciation and amortization | (6.3 | ) |  | — |
Other | (5.8 | ) |  | (5.2 | )
Total deferred income tax liabilities | (167.4 | ) |  | (275.7 | )
Net deferred income tax liabilities | $ | (79.9 | ) |  | $ | (158.7 | )
The valuation allowance for deferred income tax assets as of December 30, 2017 and December 31, 2016 was $14.5 million and $11.5 million, respectively. The net increase in the total valuation allowance for fiscal years 2017 and 2016 was $3.0 million and $2.0 million, respectively. The valuation allowance for both years is primarily related to U.S. state and local net operating loss carryforwards as well as a valuation allowance against state deferred tax assets for certain U.S. legal entities, foreign net operating loss carryforwards and tax credit carryforwards in foreign jurisdictions. The ultimate realization of the deferred tax assets depends on the generation of future taxable income in foreign jurisdictions as well as state and local tax jurisdictions. The current year change in the valuation allowance was comprised of an increase against the state deferred tax assets of $1.1 million and an increase related to state net operating loss carryforward of $2.9 million, a decrease related to an audit adjustment of a foreign net operating loss of $1.3 million and a net increase relating to the foreign net operating losses and foreign tax credits of $0.3 million. At December 30, 2017, the Company had foreign net operating loss carryforwards of $33.9 million, which have expirations ranging from 2019 to an unlimited term during which they are available to offset future foreign taxable income. The Company had U.S. state net operating loss carryforwards of $99.8 million, which have expirations ranging from 2018 to 2037 during which they are available to offset future state taxable income. The Company also had tax credit carryforwards in foreign jurisdictions of $2.6 million, which are available for an unlimited carryforward period to offset future foreign taxes. The following table summarizes the activity related to the Company’s unrecognized tax benefits:
| Fiscal Year
(In millions) | 2017 |  | 2016
Beginning balance | $ | 8.9 |  |  | $ | 8.7 |
Increases related to current year tax positions | 1.8 |  |  | 1.4 |
Decreases related to prior year positions | (1.1 | ) |  | (1.0 | )
Decrease due to lapse of statute | (0.3 | ) |  | (0.2 | )
Ending balance | $ | 9.3 |  |  | $ | 8.9 |
The portion of the unrecognized tax benefits that, if recognized currently, would reduce the annual effective tax rate was $8.5 million as of December 30, 2017 and $7.8 million as of December 31, 2016. The Company recognizes interest and penalties related to unrecognized tax benefits through interest expense and income tax expense, respectively. Interest accrued related to unrecognized tax benefits was $2.7 million as of December 30, 2017 and $2.9 million as of December 31, 2016. The Company is subject to periodic audits by domestic and foreign tax authorities. Currently, the Company is undergoing routine periodic audits in both domestic and foreign tax jurisdictions. It is reasonably possible that the amounts of unrecognized tax benefits could change in the next 12 months as a result of the audits. However, any payment of tax is not expected to be material to the consolidated financial statements. For the majority of tax jurisdictions, the Company is no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations by tax authorities for years before 2013. On December 22, 2017, the TCJA was enacted which significantly changes U.S. corporate income tax laws by, among other things, reducing the U.S. corporate income tax rate to 21% starting in 2018 and creating a territorial tax system with a one-time mandatory tax on previously deferred foreign earnings of U.S. subsidiaries. As a result, the Company recorded income tax expense of $5.6 million during the fourth quarter of 2017. This amount, which is included in the income tax expense (benefit) line item in the consolidated statements of operations, consists of two components: (i) a $58.1 million expense relating to the estimated one-time mandatory transition tax on previously deferred earnings of certain non-U.S. subsidiaries that are owned either wholly or partially by a U.S. subsidiary of the Company to be paid over eight years, and (ii) a $52.5 million benefit resulting from the remeasurement of the Company’s deferred tax assets and liabilities in the U.S. based on the new lower corporate income tax rate. As a result of the TCJA, the Company now intends to repatriate cash held in foreign jurisdictions and as such has recorded a deferred tax liability related to additional state taxes and foreign withholding taxes on the future dividends received in the U.S. from the foreign subsidiaries of $3.0 million. The amounts recorded due to the enactment of the TCJA are the Company's best estimate based on the current information and guidance available at this time, and represent provisional estimates of the transition tax, remeasurement of deferred tax accounts and deferred tax liability on future dividends associated with the TCJA, and as allowed under SAB 118, will be finalized in 2018. The Company intends to permanently reinvest all non-cash undistributed earnings outside of the U.S. and has, therefore, not established a deferred tax liability on the amount of foreign unremitted earnings of $259.0 million at December 30, 2017. However, if these non-cash undistributed earnings were repatriated, the Company would be required to accrue and pay applicable U.S. taxes and withholding taxes payable to various countries. It is not practicable to estimate the amount of the deferred tax liability associated with these non-cash unremitted earnings due to the complexity of the hypothetical calculation.

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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 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 2: 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=65882285&loc=d3e32559-109319 Reference 3: 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=65882285&loc=d3e32718-109319 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=65882285&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=65882285&loc=d3e32537-109319 + Details
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