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Income Taxes | 12 Months Ended
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Jan. 01, 2017
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes Earnings before taxes and equity in net earnings (loss) of affiliate for the years 2016, 2015 and 2014 were taxed under the following jurisdictions:
| 2016 |  | 2015 |  | 2014
| (In millions of dollars)
Domestic | $ | 112.4 |  |  | $ | 28.9 |  |  | $ | 5.9 |
Foreign | 37.3 |  |  | 34.3 |  |  | 13.2 |
Total | $ | 149.7 |  |  | $ | 63.2 |  |  | $ | 19.1 |
The provision for income taxes was as follows:
| 2016 |  | 2015 |  | 2014
| (In millions of dollars)
Current tax expense: |  |  |  |  |
U.S. federal | $ | 10.2 |  |  | $ | 8.3 |  |  | $ | 5.6 |
U.S. state and local | 2.4 |  |  | 1.4 |  |  | 1.4 |
Foreign | 10.0 |  |  | 10.8 |  |  | 12.7 |
Total current | 22.6 |  |  | 20.5 |  |  | 19.7 |
Deferred tax expense: |  |  |  |  |
U.S. federal | 11.8 |  |  | (10.6 | ) |  | (22.0 | )
U.S. state and local | 2.0 |  |  | 0.8 |  |  | (0.4 | )
Foreign | (6.4 | ) |  | (2.0 | ) |  | (4.4 | )
Total deferred | 7.4 |  |  | (11.8 | ) |  | (26.8 | )
Total provision | $ | 30.0 |  |  | $ | 8.7 |  |  | $ | (7.1 | )
Deferred taxes are comprised of the following:
| 2016 |  | 2015
| (In millions of dollars)
Depreciation and amortization | $ | (14.6 | ) |  | $ | (14.3 | )
Employee compensation and benefit plans | 75.5 |  |  | 70.6 |
Workers’ compensation | 22.4 |  |  | 21.4 |
Unrealized gain on securities | (33.6 | ) |  | (36.7 | )
Investment in equity affiliate | (22.7 | ) |  | 4.0 |
Loss carryforwards | 36.4 |  |  | 40.6 |
Credit carryforwards | 121.2 |  |  | 113.4 |
Other, net | 3.5 |  |  | 4.1 |
Valuation allowance | (42.1 | ) |  | (50.9 | )
Net deferred tax assets | $ | 146.0 |  |  | $ | 152.2 |
The deferred tax balance is classified in the consolidated balance sheet as:
| 2016 |  | 2015
| (In millions of dollars)
Deferred tax asset | $ | 180.1 |  |  | $ | 189.3 |
Other long-term liabilities | (34.1 | ) |  | (37.1 | )
| $ | 146.0 |  |  | $ | 152.2 |
The differences between income taxes from continuing operations for financial reporting purposes and the U.S. statutory rate of 35% are as follows:
| 2016 |  | 2015 |  | 2014
| (In millions of dollars)
Income tax based on statutory rate | $ | 52.4 |  |  | $ | 22.1 |  |  | $ | 6.7 |
State income taxes, net of federal benefit | 2.9 |  |  | 1.3 |  |  | 0.7 |
General business credits | (17.0 | ) |  | (17.9 | ) |  | (17.5 | )
Life insurance cash surrender value | (3.0 | ) |  | 0.3 |  |  | (2.2 | )
Foreign items | 0.4 |  |  | (2.5 | ) |  | (1.1 | )
Foreign business taxes | 3.6 |  |  | 3.7 |  |  | 4.2 |
Foreign tax law change | — |  |  | (0.7 | ) |  | (2.2 | )
TS Kelly Asia Pacific transaction gain | (4.8 | ) |  | — |  |  | — |
Non-deductible expenses | 1.6 |  |  | 2.3 |  |  | 2.1 |
Change in deferred tax realizability | (5.9 | ) |  | — |  |  | 2.2 |
Other, net | (0.2 | ) |  | 0.1 |  |  | — |
Total | $ | 30.0 |  |  | $ | 8.7 |  |  | $ | (7.1 | )
General business credits primarily represent U.S. work opportunity credits. Foreign items include foreign income tax rate differences, foreign tax credits and deductions, and foreign non-deductible expenses and non-taxable income. Foreign business taxes include the French business tax and other taxes based on revenue less certain expenses and are classified as income taxes under ASC Topic 740 (“ASC 740”), Income Taxes. The Company has U.S. general business credit carryforwards of $116.3 million which will expire from 2032 to 2036, foreign tax credit carryforwards of $4.8 million that expire from 2022 to 2026 and $0.1 million of state credit carryforwards that expire from 2017 to 2036, or have no expiration. The net tax effect of state and foreign loss carryforwards at year-end 2016 totaled $36.4 million, which expire as follows (in millions of dollars):
Year |  | Amount
2017-2019 |  | $ | 1.9 |
2020-2022 |  | 0.7 |
2023-2026 |  | 0.2 |
2027-2029 |  | 0.1 |
No expiration |  | 33.5 |
Total |  | $ | 36.4 |
The Company has established a valuation allowance for loss carryforwards and future deductible items in certain foreign jurisdictions, and for U.S. foreign tax credit carryforwards. The valuation allowance is determined in accordance with the provisions of ASC 740, which requires an assessment of both negative and positive evidence when measuring the need for a valuation allowance. The Company’s recent losses in these foreign jurisdictions, and its recent lack of adequate U.S. foreign source income to fully utilize foreign tax credit carryforwards, represented sufficient negative evidence to require a valuation allowance under ASC 740. The Company intends to maintain a valuation allowance until sufficient positive evidence exists to support realization of the foreign deferred tax assets. Provision has not been made for U.S. or additional foreign income taxes on an estimated $110.5 million of undistributed earnings which are permanently reinvested. If these earnings were to be repatriated, the Company would be subject to U.S. income taxes and foreign withholding taxes, adjusted for foreign tax credits. Determination of the amount of any unrecognized deferred income tax liability related to these undistributed earnings is not practicable due to the complexities associated with this hypothetical calculation. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
| 2016 |  | 2015 |  | 2014
| (In millions of dollars)
Balance at beginning of the year | $ | 1.7 |  |  | $ | 2.4 |  |  | $ | 2.8 |
Additions for prior years’ tax positions | 0.1 |  |  | 0.1 |  |  | — |
Reductions for prior years’ tax positions | — |  |  | (0.7 | ) |  | (0.4 | )
Additions for settlements | — |  |  | — |  |  | — |
Reductions for settlements | — |  |  | — |  |  | — |
Reductions for expiration of statutes | (0.4 | ) |  | (0.1 | ) |  | — |
Balance at end of the year | $ | 1.4 |  |  | $ | 1.7 |  |  | $ | 2.4 |
If the $1.4 million in 2016, $1.7 million in 2015 and $2.4 million in 2014 of unrecognized tax benefits were recognized, they would have a favorable effect of $1.0 million in 2016, $1.1 million in 2015 and $1.5 million in 2014 on income tax expense. The Company recognizes both interest and penalties as part of the income tax provision. Interest and penalties expense in 2016 was not significant. The Company recognized a benefit of $0.2 million in 2015 and expense of $0.1 million in 2014 for interest and penalties. Accrued interest and penalties were $0.2 million at year-end 2016 and $0.2 million at year-end 2015. The Company files income tax returns in the U.S. and in various states and foreign countries. The tax periods open to examination by the major taxing jurisdictions to which the Company is subject include the U.S. for fiscal years 2013 through 2016, Canada for fiscal years 2009 through 2016, France for fiscal years 2014 through 2016, Mexico for fiscal years 2011 through 2016, Portugal for fiscal years 2013 through 2016, and Switzerland for fiscal years 2007 through 2016. The Company and its subsidiaries have various income tax returns in the process of examination. The unrecognized tax benefit and related interest and penalty balances include approximately $0.4 million for 2016, related to tax positions which are reasonably possible to change within the next twelve months due to income tax audits, settlements and statute expirations.

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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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