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Income Taxes | 12 Months Ended
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Dec. 31, 2016
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes Significant components of the provision for income taxes including those related to non-controlling interest are as follows:
(In thousands) | 2016 |  |  | 2015 |  |  | 2014 |
Current: |  |  |  |  |
Federal |  | $18,963 |  |  |  | $27,768 |  |  |  | $22,738 |
State | 3,740 |  |  | 5,258 |  |  | 4,623 |
Foreign | 1,450 |  |  | 1,713 |  |  | 972 |
Current provision | 24,153 |  |  | 34,739 |  |  | 28,333 |
Deferred: |  |  |  |  |  |  |  |
Federal | 18,167 |  |  | 15,348 |  |  | 13,692 |
State | 2,533 |  |  | 2,217 |  |  | 2,013 |
Foreign | (1,580 | ) |  | (540 | ) |  | (262 | )
Deferred provision | 19,120 |  |  | 17,025 |  |  | 15,443 |
Total income tax expense |  | $43,273 |  |  |  | $51,764 |  |  |  | $43,776 |
The differences between the actual tax expense and tax expense computed at the statutory U.S. Federal tax rate are explained as follows:
| 2016 |  |  | 2015 |  |  | 2014 |
Federal statutory tax expense |  | $45,098 |  |  |  | $55,020 |  |  |  | $36,836 |
State taxes, net of federal tax effect | 3,874 |  |  | 4,269 |  |  | 4,118 |
Credit for increasing research activities | (3,808 | ) |  | (3,320 | ) |  | (2,569 | )
Deduction related to domestic production activities | (2,243 | ) |  | (3,320 | ) |  | (1,751 | )
Valuation allowance | 231 |  |  | 565 |  |  | 2,474 |
Goodwill Impairment | — |  |  | — |  |  | 4,298 |
Change in uncertain tax positions | 117 |  |  | (1,344 | ) |  | 1,099 |
Other – net | 4 |  |  | (106 | ) |  | (729 | )
Total income tax expense |  | $43,273 |  |  |  | $51,764 |  |  |  | $43,776 |
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Corporation’s deferred tax liabilities and assets are as follows:
(In thousands) | 2016 |  |  | 2015 |
Deferred Taxes |  |  |
Allowance for doubtful accounts |  | $495 |  |  |  | $1,089 |
Compensation | 16,684 |  |  | 15,491 |
Inventory differences | 3,977 |  |  | 4,497 |
Marketing accrual | 1,458 |  |  | 1,355 |
Stock-based compensation | 11,607 |  |  | 11,923 |
Accrued post-retirement benefit obligations | 10,106 |  |  | 9,851 |
Vacation accrual | 4,153 |  |  | 4,181 |
Warranty accrual | 5,725 |  |  | 6,052 |
Other – net | 13,044 |  |  | 12,167 |
Total deferred tax assets |  | $67,249 |  |  |  | $66,606 |
Deferred income | (5,716 | ) |  | (4,907 | )
Goodwill and other intangible assets | (87,146 | ) |  | (79,471 | )
Prepaids | (9,271 | ) |  | (7,876 | )
Tax over book depreciation | (70,946 | ) |  | (59,308 | )
Total deferred tax liabilities |  | ($173,079 | ) |  |  | ($151,562 | )
Valuation allowance | (4,159 | ) |  | (3,978 | )
Total net deferred tax liabilities |  | ($109,989 | ) |  |  | ($88,934 | )
Long term net deferred tax assets | 719 |  |  | — |
Long term net deferred tax liabilities | (110,708 | ) |  | (88,934 | )
Total net deferred tax liabilities |  | ($109,989 | ) |  |  | ($88,934 | )
The valuation allowance for deferred tax assets is as follows:
Valuation allowance for deferred tax asset (in thousands) | Balance at beginning of period |  | Charged to expenses |  | Adjustments to balance sheet |  | Balance at end of period
Year ended December 31, 2016 |  | $3,978 |  |  | 231 |  |  |  | ($50 | ) |  |  | $4,159 |
Year ended January 2, 2016 |  | $3,413 |  |  | 565 |  |  | — |  |  |  | $3,978 |
Year ended January 3, 2015 |  | $1,579 |  |  |  | $2,474 |  |  |  | ($640 | ) |  |  | $3,413 |
At December 31, 2016, the Corporation has approximately $0.1 million of U.S. state tax net operating losses and $2.0 million of U.S. state tax credits which expire over the next twenty years. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
(in thousands) | 2016 |  |  | 2015 |
Unrecognized tax benefits, beginning of period |  | $2,858 |  |  |  | $4,250 |
Increases in positions taken in a prior period | 86 |  |  | 82 |
Decreases in positions taken in a prior period | — |  |  | (1,611 | )
New positions taken in a current period | 792 |  |  | 793 |
Decrease due to settlements | (560 | ) |  | — |
Decrease due to lapse of statute of limitations | (133 | ) |  | (656 | )
Unrecognized tax benefits, end of period |  | $3,043 |  |  |  | $2,858 |
The amount of unrecognized tax benefits which would impact the Corporation’s effective tax rate, if recognized, was $3.0 million at December 31, 2016 and $2.8 million at January 2, 2016. As of December 31, 2016, it is reasonably possible the amount of unrecognized tax benefits may increase or decrease within the twelve months following the reporting date. These increases or decreases in the unrecognized tax benefits would be due to new positions that may be taken on income tax returns, settlement of tax positions and the closing of statutes of limitation. It is not expected any of the changes will be material individually or in total to the results or financial position of the Corporation. The Corporation recognized interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses consistent with the recognition of these items in prior reporting. Interest and penalties recognized in the Consolidated Statements of Income amounted to a detriment of $0.1 million, a benefit of $0.1 million and $0.0 million in the years ended December 31, 2016, January 2, 2016 and January 3, 2015, respectively. The Corporation had recorded a liability for interest and penalties related to unrecognized tax benefits of $0.2 million and $0.1 million as of December 31, 2016 and January 2, 2016, respectively. Tax years 2013 through 2016 remain open for examination by the Internal Revenue Service ("IRS"). The Corporation is currently under examination for the 2014 federal tax return and in various state jurisdictions, of which years 2012 through 2016 remain open to examination. Deferred income taxes are provided to reflect differences between the tax basis of assets and liabilities and their reported amounts in the financial statements. The Corporation provides for taxes that may be payable if undistributed earnings of overseas subsidiaries were to be remitted to the United States, except for those earnings it considers to be permanently reinvested. There were approximately $32.4 million of accumulated earnings considered permanently reinvested in Canada, China, and Hong Kong as of December 31, 2016. The Corporation believes the U.S tax cost on unremitted foreign earnings would be approximately $9.6 million if the amounts were not considered permanently reinvested.

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