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Income Taxes | 12 Months Ended
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Dec. 28, 2013
Income Taxes |
Income Taxes | 14. Income Taxes The components of income (loss) before (provision) benefit for income taxes are as follows (in thousands):
|  | Fiscal Year |  | Fiscal Year |  | Fiscal Year |
--- | --- | --- | --- | --- | --- | --- | ---
|  | 2013 (52 weeks) |  | 2012 (52 weeks) |  | 2011 (52 weeks) |
Income (loss) before (provision) benefit for income taxes: |  |  |  |  |  |  |  |  |  |
U.S. |  | $ | 13,659 |  | $ | (27,290 | ) | $ | 26,150 |
Foreign |  |  | 4,259 |  |  | (30,733 | ) |  | 1,933 |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Total |  | $ | 17,918 |  | $ | (58,023 | ) | $ | 28,083 |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
The components of income tax provision (benefit) have been recorded in CRA's financial statements as follows (in thousands):
|  | Fiscal Year |  | Fiscal Year |  | Transition Period |
--- | --- | --- | --- | --- | --- | --- | ---
|  | 2013 (52 weeks) |  | 2012 (52 weeks) |  | 2011 (52 weeks) |
Income tax provision (benefit) |  | $ | 6,683 |  | $ | (5,180 | ) | $ | 11,138 |
Tax deficit on stock option exercises and restricted share vesting charged directly to common stock |  |  | 254 |  |  | 576 |  |  | 639 |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
|  | $ | 6,937 |  | $ | (4,604 | ) | $ | 11,777 |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
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The provision (benefit) for income taxes consists of the following (in thousands):
|  | Fiscal Year |  | Fiscal Year |  | Fiscal Year |
--- | --- | --- | --- | --- | --- | --- | ---
|  | 2013 (52 weeks) |  | 2012 (52 weeks) |  | 2011 (52 weeks) |
Currently payable: |  |  |  |  |  |  |  |  |  |
Federal |  | $ | 1,241 |  | $ | 3,637 |  | $ | 15,964 |
Foreign |  |  | 1,264 |  |  | 50 |  |  | 309 |
State |  |  | 254 |  |  | 1,015 |  |  | 3,604 |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
|  |  | 2,759 |  |  | 4,702 |  |  | 19,877 |
Deferred: |  |  |  |  |  |  |  |  |  |
Federal |  |  | 3,592 |  |  | (8,163 | ) |  | (6,829 | )
Foreign |  |  | (238 | ) |  | 21 |  |  | (286 | )
State |  |  | 570 |  |  | (1,740 | ) |  | (1,624 | )
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
|  | $ | 3,924 |  | $ | (9,882 | ) | $ | (8,739 | )
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
|  | $ | 6,683 |  | $ | (5,180 | ) | $ | 11,138 |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
A reconciliation of CRA's tax rates with the federal statutory rate is as follows:
|  | Fiscal Year |  | Fiscal Year |  | Fiscal Year |
--- | --- | --- | --- | --- | --- | --- | ---
|  | 2013 |  | 2012 |  | 2011 |
Federal statutory rate |  |  | 35.0 | % |  | (35.0 | )% |  | 35.0 | %
State income taxes, net of federal income tax benefit |  |  | 4.4 |  |  | (1.3 | ) |  | 7.0 |
Goodwill impairment |  |  | — |  |  | 20.6 |  |  | — |
Foreign losses benefited |  |  | (2.8 | ) |  | (0.1 | ) |  | (3.0 | )
Losses not benefited |  |  | 0.3 |  |  | 4.2 |  |  | — |
Foreign rate differential |  |  | (0.4 | ) |  | 2.1 |  |  | 0.9 |
Foreign tax credit |  |  | (0.1 | ) |  | (0.5 | ) |  | (1.4 | )
Uncertain tax positions |  |  | (2.1 | ) |  | — |  |  | — |
Impact of NeuCo's tax provision charges |  |  | 1.5 |  |  | 0.1 |  |  | 1.2 |
Permanently disallowed expenses |  |  | 1.6 |  |  | 1.0 |  |  | 1.5 |
Other |  |  | (0.1 | ) |  | — |  |  | (1.5 | )
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
|  |  | 37.3 | % |  | (8.9 | )% |  | 39.7 | %
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
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The components of CRA's deferred tax assets (liabilities) are as follows (in thousands):
|  | December 28, 2013 |  | December 29, 2012 |
--- | --- | --- | --- | --- | ---
Deferred tax assets: |  |  |  |  |  |  |
Accrued compensation and related expense |  | $ | 21,064 |  | $ | 16,743 |
Tax basis in excess of financial basis of net accounts receivable |  |  | 2,363 |  |  | 2,382 |
Net operating loss carryforwards |  |  | 5,421 |  |  | 6,682 |
Tax basis in excess of financial basis of fixed assets |  |  | 1,489 |  |  | 978 |
Excess tax over book amortization |  |  | — |  |  | 5,926 |
Accrued expenses and other |  |  | 902 |  |  | 2,565 |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Total gross deferred tax assets |  |  | 31,239 |  |  | 35,276 |
Less: valuation allowance |  |  | (6,101 | ) |  | (7,287 | )
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Total deferred tax assets net of valuation allowance |  |  | 25,138 |  |  | 27,989 |
Deferred tax liabilities: |  |  |  |  |  |  |
Tax basis in excess of financial basis of debentures |  |  | 5,024 |  |  | 6,371 |
Excess book over tax amortization |  |  | 2,938 |  |  | — |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Total deferred tax liabilities |  |  | 7,962 |  |  | 6,371 |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Net deferred tax assets |  | $ | 17,176 |  | $ | 21,618 |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
In general, a valuation allowance is recorded against deferred tax assets because CRA's management believes, after considering the available evidence, that it is more likely than not that the assets will not be realized. Reductions in valuation allowances are a result of management's consideration of historical profitability, future expected results and the nature of the related deferred tax assets. The net change in the total valuation allowance for fiscal 2013 was a decrease of approximately $1.2 million compared to fiscal 2012. The $1.2 million decrease was related to the recording of a $1.4 million increase to a deferred tax liability in fiscal 2013 associated with goodwill and a corresponding decrease to valuation allowance and to the utilization of $0.6 million of certain prior net operating losses, offset partially by additional valuation allowances recorded against certain net deferred assets including foreign net operating losses of $0.4 million and NeuCo net operating losses of $0.4 million. The net change in the total valuation allowance for fiscal 2012 was an increase of approximately $2.3 million compared to fiscal 2011. The net change was related to the recording of additional valuation allowances against certain foreign net deferred assets including foreign net operating losses of $2.5 million reduced by the utilization of $0.2 million of certain prior net operating losses. The ultimate realization of deferred tax assets that continue to be subject to valuation allowances is dependent upon the generation of future taxable income during the periods and in the tax jurisdictions in which those temporary differences become deductible. At December 28, 2013 CRA had $11.8 million of foreign net operating loss carry forwards and $0.4 million in U.S. state net operating loss carryforwards. NeuCo has net operating loss carryforwards for U.S. federal and U.S. state tax purposes of $6.1 million which are subject to a full valuation allowance and begin to expire in 2021. NeuCo files a separate U.S. federal tax return and none of its losses are available to offset CRA's consolidated taxable income. The foreign operating losses have an indefinite life, except for $0.2 million that will begin to expire in 2016. The aggregate changes in the balances of gross unrecognized tax benefits were as follows (in thousands):
|  | December 28, 2013 |  | December 29, 2012 |
--- | --- | --- | --- | --- | ---
Balance at beginning of period |  | $ | 3,032 |  | $ | 943 |
Additions for tax positions taken during prior years |  |  | 372 |  |  | 2,344 |
Settlements with tax authorities |  |  | (3,032 | ) |  | (255 | )
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Balance at end of the period |  | $ | 372 |  | $ | 3,032 |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
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CRA files income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. A number of years may elapse before an uncertain tax position, for which CRA has unrecognized tax benefits, is audited and finally resolved. While it is often difficult to predict the final outcome or the timing of resolution of any particular uncertain tax position, CRA believes that its unrecognized tax benefits reflect the most likely outcome. CRA adjusts these unrecognized tax benefits, and the associated interest, in light of changing facts and circumstances. At the end of fiscal 2013, CRA had $67,000 of interest on its unrecognized tax benefit balance. CRA reports accrued interest and penalties related to unrecognized tax benefits in income tax expense. Settlement of any particular position could require the use of cash. Of the total $372,000 balance at the end of fiscal 2013, a favorable resolution would result in $47,000 being recognized as a reduction to the effective income tax rate in the period of resolution. It is reasonably likely that $47,000 of unrecognized tax benefits will reverse within the next twelve months. The number of years with open tax audits varies depending on the tax jurisdiction. CRA's major taxing jurisdiction is the United States. CRA is no longer subject to U.S. federal examinations by the Internal Revenue Service for years before fiscal 2012. CRA's United Kingdom subsidiary's corporate tax returns are no longer subject to examination by Her Majesty's Revenue and Customs for fiscal years before fiscal 2011. CRA believes its reserves for uncertain tax positions are adequate. CRA has not provided for deferred income taxes or foreign withholding taxes on undistributed earnings from its foreign subsidiaries of approximately $3.2 million as of December 28, 2013 because such earnings are considered to be indefinitely reinvested. CRA does not rely on these unremitted earnings as a source of funds for its domestic business as it expects to have sufficient cash flow in the U.S. to fund its U.S. operational and strategic needs. If CRA were to repatriate its foreign earnings that are indefinitely reinvested, it would accrue substantially no additional tax expense.

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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 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 2: 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 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph h -Article 4 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=6907707&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=6907707&loc=d3e32537-109319 Reference 6: 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=6907707&loc=d3e32559-109319 + Details
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