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Income Taxes (Notes) | 12 Months Ended
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Jan. 01, 2022
Income Tax Disclosure [Abstract] |
Income Taxes | INCOME TAXES The geographic components of earnings (loss) before income taxes are as follows:
| Fiscal Year
(In millions) | 2021 |  | 2020 |  | 2019
United States | $ | 22.7 |  |  | $ | (218.6) |  |  | $ | 79.3 |
Foreign | 57.6 |  |  | 34.5 |  |  | 66.6 |
Earnings (loss) before income taxes | $ | 80.3 |  |  | $ | (184.1) |  |  | $ | 145.9 |
The provisions for income tax expense (benefit) consist of the following:
| Fiscal Year
(In millions) | 2021 |  | 2020 |  | 2019
Current expense: |  |  |  |  |
Federal | $ | 14.6 |  |  | $ | 0.7 |  |  | $ | 10.6 |
State | 2.5 |  |  | 0.6 |  |  | 0.5 |
Foreign | 15.0 |  |  | 8.3 |  |  | 12.5 |
Deferred expense (benefit): |  |  |  |  |
Federal | (17.1) |  |  | (51.6) |  |  | (5.8) |
State | (1.8) |  |  | (4.4) |  |  | (2.0) |
Foreign | 0.1 |  |  | 0.9 |  |  | 1.2 |
Income tax expense (benefit) | $ | 13.3 |  |  | $ | (45.5) |  |  | $ | 17.0 |
A reconciliation of the Company’s total income tax expense and the amount computed by applying the statutory federal income tax rate to earnings before income taxes is as follows:
| Fiscal Year
(In millions) | 2021 |  | 2020 |  | 2019
Income taxes at U.S. statutory rate of 21% | $ | 16.9 |  |  | $ | (38.7) |  |  | $ | 30.6 |
State income taxes, net of federal income tax | (1.1) |  |  | (8.1) |  |  | 0.5 |
Foreign earnings taxed at rates different from the U.S. statutory rate: |  |  |  |  |
Hong Kong | (7.2) |  |  | (3.3) |  |  | (8.5) |
Other | 3.1 |  |  | 1.2 |  |  | 2.8 |
Adjustments for uncertain tax positions | (1.3) |  |  | (1.4) |  |  | (1.0) |
Change in valuation allowance | 2.2 |  |  | 4.7 |  |  | (0.2) |
Change in state tax rates | — |  |  | — |  |  | (1.5) |
Global Intangible Low Tax Income tax | 3.2 |  |  | 2.5 |  |  | 2.1 |
Foreign Derived Intangible Income tax benefit | (3.7) |  |  | (1.6) |  |  | (4.4) |
Non-deductible executive compensation | 5.2 |  |  | 1.6 |  |  | 2.0 |
Permanent adjustments related to employee share based compensation | (3.7) |  |  | (4.6) |  |  | (5.1) |
Deferred tax on future cash dividends | (0.9) |  |  | 1.0 |  |  | 0.6 |
Income tax audit adjustments | 2.5 |  |  | — |  |  | — |
Deferred adjustment for income tax audit | (1.2) |  |  | — |  |  | — |
Other Permanent adjustments and non-deductible expenses | (0.3) |  |  | 1.0 |  |  | (0.6) |
Other | (0.4) |  |  | 0.2 |  |  | (0.3) |
Income tax expense (benefit) | $ | 13.3 |  |  | $ | (45.5) |  |  | $ | 17.0 |
Significant components of the Company’s deferred income tax assets and liabilities are as follows:
(In millions) | January 1, 2022 |  | January 2, 2021
Deferred income tax assets: |  |  |
Accounts receivable and inventory valuation allowances | $ | 5.2 |  |  | $ | 3.5 |
Deferred compensation accruals | 7.2 |  |  | 4.5 |
Accrued pension expense | 25.7 |  |  | 33.4 |
Stock-based compensation | 8.2 |  |  | 9.1 |
Net operating loss and foreign tax credit carryforwards | 18.5 |  |  | 21.0 |
Book over tax depreciation and amortization | 0.4 |  |  | 0.4 |
Tenant lease expenses | 4.0 |  |  | 4.4 |
Environmental reserve | 33.7 |  |  | 24.9 |
Other | 9.5 |  |  | 9.1 |
Total gross deferred income tax assets | 112.4 |  |  | 110.3 |
Less valuation allowance | (24.6) |  |  | (22.3) |
Net deferred income tax assets | 87.8 |  |  | 88.0 |
Deferred income tax liabilities: |  |  |
Intangible assets | (190.6) |  |  | (105.3) |
Tax over book depreciation and amortization | (9.3) |  |  | (10.7) |
Other | (5.0) |  |  | (4.3) |
Total deferred income tax liabilities | (204.9) |  |  | (120.3) |
Net deferred income tax liabilities | $ | (117.1) |  |  | $ | (32.3) |
The valuation allowance for deferred income tax assets as of January 1, 2022 and January 2, 2021 was $24.6 million and $22.3 million, respectively. The net increase in the total valuation allowance during fiscal 2021 was $2.3 million. 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 results in an increase against the state deferred tax assets of $1.0 million, an increase related to state net operating loss carryforward of $0.5 million, and a net increase relating to the foreign net operating losses and foreign tax credits and other deferred tax assets of $0.8 million. At January 1, 2022, the Company had foreign net operating loss carryforwards of $30.4 million, which have expirations ranging from 2022 to an unlimited term during which they are available to offset future foreign taxable income. The Company had U.S. federal net operating loss carryforwards, state net operating loss carryforwards and Internal Revenue Code section 163(j) interest expense carryforwards of $15.7 million, $234.4 million and $32.5 million respectively, which have expirations ranging from 2022 to an unlimited term during which they are available to offset future state taxable income. The Company also had tax credit carryforwards in foreign jurisdictions of $2.9 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) | 2021 |  | 2020
Unrecognized tax benefits at beginning of the year | $ | 5.5 |  |  | $ | 6.9 |
Increases related to current year tax positions | 7.8 |  |  | 2.6 |
Decreases related to prior year positions | (0.9) |  |  | (1.3) |
Decreases relating to settlements with taxing authorities | (1.4) |  |  | (2.4) |
Decrease due to lapse of statute | (0.1) |  |  | (0.3) |
Unrecognized tax benefits at end of the year | $ | 10.9 |  |  | $ | 5.5 |
The portion of the unrecognized tax benefits that, if recognized currently, would reduce the annual effective tax rate was $10.1 million and $5.0 million as of January 1, 2022 and January 2, 2021, respectively. 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 $0.6 million and $0.6 million as of January 1, 2022 and January 2, 2021, respectively. 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 2017. The Company 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 $1.4 million and $2.2 million for fiscal years 2021 and 2020, respectively. 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 non-cash foreign undistributed earnings of $199.1 million at January 1, 2022. 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/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
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