Income Taxes

9 Months Ended

Oct. 02, 2021

Income Taxes [Abstract]

Income Taxes

Note 4 – Income Taxes

The provision for income taxes consists of provisions for federal, state, and foreign income taxes.  The effective tax rates for the periods ended October 2, 2021 and October 3, 2020 reflect the Company’s expected tax rate on reported income before income tax and tax adjustments. The Company operates in a global environment with significant operations in various jurisdictions outside the United States.  Accordingly, the consolidated income tax rate is a composite rate reflecting the Company’s earnings and the applicable tax rates in the various jurisdictions where the Company operates.

The Company adjusted its deferred tax balances by $12,127 upon the adoption of ASU No. 2020-06 on January 1, 2021, which was included in the cumulative-effect adjustment recorded to retained earnings.  See Note 1.

The Company recognized tax benefits of $5,714 due to the release of a valuation allowance during the fiscal quarter ended October 2, 2021.  The Company also recognized tax benefits of $8,276 due to changes in tax regulations during the nine fiscal months ended October 2, 2021.

During the nine fiscal months ended October 2, 2021, the liabilities for unrecognized tax benefits decreased by $1,328 on a net basis, primarily due to a payment, statute expiration, and currency translation adjustments, partially offset by accruals for current year tax positions and interest.