XML 32 R19.htm IDEA: XBRL DOCUMENT v3.24.1.u1
Income Taxes (Notes)
 3 Months Ended
Mar. 30, 2024
Income Tax Disclosure [Abstract]  
Income Taxes INCOME TAXES
The Company maintains management and operational activities in overseas subsidiaries, and its foreign earnings are taxed at rates that are different than the U.S. federal statutory income tax rate. A significant amount of the Company’s earnings are generated by its Canadian, European and Asian subsidiaries and, to a lesser extent, in jurisdictions that are not subject to income tax.
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 that amount of foreign unremitted earnings. 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.
The Company’s effective tax rates for the quarters ended March 30, 2024 and April 1, 2023 were 4.1% and 36.3%, respectively. In both the current and prior years, the Company recognized discrete tax expenses related to stock-based compensation. In the current year, the discrete tax expense reduced the tax benefit of the pretax loss which resulted in a decrease to the effective tax rate. In the prior year, the discrete tax expense increased the tax expense on the pretax income which resulted in an increase to the effective tax rate.
The Company is subject to periodic audits by U.S. federal, state, local and non-U.S. tax authorities. Currently, the Company is undergoing routine periodic audits in both U.S. federal, state, local and non-U.S. 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 significant to the consolidated condensed financial statements. 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 2020 in the majority of tax jurisdictions.