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Income Taxes | 12 Months Ended
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Jan. 02, 2016
Income Taxes |
11. | Income Taxes
The following tables summarize the Company’s consolidated provision for US federal, state and foreign taxes on income:
|  | January 2, 2016 |  |  | January 3, 2015 |  |  | December 28, 2013 |
Current: |  |  |  |  |  |  |  |  |  |  |  |
US federal |  | $ | (6,862 | ) |  | $ | 12,904 |  |  | $ | 60,030 |
State |  |  | 1,859 |  |  |  | (131 | ) |  |  | 9,583 |
Foreign |  |  | 15,740 |  |  |  | 24,059 |  |  |  | 25,647 |
|  | $ | 10,737 |  |  | $ | 36,832 |  |  | $ | 95,260 |
Deferred: |  |  |  |  |  |  |  |  |  |  |  |
US federal |  | $ | 10,756 |  |  | $ | 25,162 |  |  | $ | 30,513 |
State |  |  | 1,890 |  |  |  | 2,876 |  |  |  | 3,487 |
Foreign |  |  | (548 | ) |  |  | 1,061 |  |  |  | 358 |
|  | $ | 12,098 |  |  | $ | 29,099 |  |  | $ | 34,358 |
Total tax provision |  | $ | 22,835 |  |  | $ | 65,931 |  |  | $ | 129,618 |
The components of the Company’s consolidated income before income taxes consist of the following:
|  | January 2, 2016 |  |  | January 3, 2015 |  |  | December 28, 2013 |
Domestic |  | $ | 6,299 |  |  | $ | 88,024 |  |  | $ | 248,637 |
Foreign |  |  | 49,315 |  |  |  | 95,640 |  |  |  | 83,723 |
|  | $ | 55,614 |  |  | $ | 183,664 |  |  | $ | 332,360 |
The difference between the US federal statutory tax rate and the Company’s consolidated effective tax rate is as follows:
|  | January 2, 2016 |  |  | January 3, 2015 |  |  | December 28, 2013 |
US federal statutory rate |  |  | 35.0 | % |  |  | 35.0 | % |  |  | 35.0 | %
States income taxes (net of federal benefit) |  |  | 3.8 |  |  |  | 1.3 |  |  |  | 2.7 |
Reserves for uncertain tax positions |  |  | 3.5 |  |  |  | 0.4 |  |  |  | (0.1 | )
Foreign taxes |  |  | (0.4 | ) |  |  | (0.6 | ) |  |  | 0.4 |
(Decrease) increase in valuation allowance |  |  | (2.2 | ) |  |  | 1.7 |  |  |  | 0.9 |
Loss on closure of China |  |  | 0.0 |  |  |  | (2.1 | ) |  |  | 0.0 |
Other |  |  | 1.4 |  |  |  | 0.2 |  |  |  | 0.1 |
Effective tax rate |  |  | 41.1 | % |  |  | 35.9 | % |  |  | 39.0 | %
The deferred tax assets and liabilities recorded on the Company’s consolidated balance sheets are as follows:
|  | January 2, 2016 |  |  | January 3, 2015 |
Provision for estimated expenses |  | $ | 4,638 |  |  | $ | 7,863 |
Depreciation |  |  | 4,164 |  |  |  | 0 |
Operating loss carryforwards |  |  | 34,285 |  |  |  | 37,746 |
Salaries and wages |  |  | 641 |  |  |  | 9,567 |
Share-based compensation |  |  | 14,330 |  |  |  | 6,653 |
Other |  |  | 8,024 |  |  |  | 6,922 |
Other comprehensive income |  |  | 24,778 |  |  |  | 13,060 |
Less: valuation allowance |  |  | (28,279 | ) |  |  | (34,640 | )
Total deferred tax assets |  | $ | 62,581 |  |  | $ | 47,171 |
Depreciation |  | $ | 0 |  |  | $ | (6,482 | )
Other |  |  | (1,823 | ) |  |  | (3,123 | )
Amortization |  |  | (210,901 | ) |  |  | (188,745 | )
Total deferred tax liabilities |  | $ | (212,724 | ) |  | $ | (198,350 | )
Net deferred tax liabilities |  | $ | (150,143 | ) |  | $ | (151,179 | )
Certain foreign operations of the Company have generated net operating loss carryforwards. If it has been determined that it is more-likely-than-not that the deferred tax assets associated with these net operating loss carryforwards will not be utilized, a valuation allowance has been recorded. As of January 2, 2016 and January 3, 2015, various foreign subsidiaries had net operating loss carryforwards of approximately $138,562 and $142,433, respectively, most of which can be carried forward indefinitely. The Company’s undistributed earnings of substantially all of its foreign subsidiaries are not considered to be permanently reinvested. Accordingly, the Company has recorded all taxes, after taking into account foreign tax credits, on the undistributed earnings of these foreign subsidiaries. The undistributed earnings of the remaining foreign subsidiaries are indefinitely invested outside the United States. We have not recorded a deferred tax liability of approximately $10,000 for the U.S. income taxes on the undistributed earnings of these foreign subsidiaries. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
|  | January 2, 2016 |  |  | January 3, 2015 |  |  | December 28, 2013 |
Balance at beginning of year |  | $ | 6,268 |  |  | $ | 5,784 |  |  | $ | 5,319 |
Additions based on tax positions related to the current year |  |  | 2,106 |  |  |  | 1,304 |  |  |  | 1,428 |
Reductions for tax positions of prior years |  |  | (676 | ) |  |  | (820 | ) |  |  | (963 | )
Balance at end of year |  | $ | 7,698 |  |  | $ | 6,268 |  |  | $ | 5,784 |
At January 2, 2016, the total amount of unrecognized tax benefits that, if recognized, would affect our effective tax rate is $6,948. As of January 2, 2016, given the nature of the Company’s uncertain tax positions, it is reasonably possible that there will not be a significant change in the Company’s uncertain tax benefits within the next twelve months. The Company recognizes interest and penalties related to unrecognized tax benefits in income tax expense. The Company had $1,229 and $2,300 of accrued interest and penalties at January 2, 2016 and January 3, 2015, respectively. The Company recognized $(266), $83, and $(1,188) in interest and penalties during the fiscal years ended January 2, 2016, January 3, 2015 and December 28, 2013, respectively. The Company or one of its subsidiaries files income tax returns in the US federal jurisdiction, and various state and foreign jurisdictions. At January 2, 2016, with few exceptions, the Company was no longer subject to US federal, state or local income tax examinations by tax authorities for years prior to 2012, or non-US income tax examinations by tax authorities for years prior to 2009.

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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=6907707&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=6907707&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=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 + Details
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