XML 33 R20.htm IDEA: XBRL DOCUMENT v3.7.0.1
Income Taxes
6 Months Ended
Jun. 30, 2017
Income Taxes [Abstract]  
Income Taxes

11.  Income Taxes

The Company and its subsidiaries file income tax returns in the U.S. Federal jurisdiction, which is the Company’s primary tax jurisdiction, and various state and foreign jurisdictions. At June 30, 2017, the statutes of limitations for the Company’s U.S. Federal income tax returns for the years ended December 31, 2010 through 2015 were open. The U.S. Internal Revenue Service (IRS) commenced audits of the Company’s U.S. Federal income tax returns for the years ended 2012 and 2013. The Company cannot predict the outcome of the audits at this time.

The effective income tax rate for the quarterly period ended June 30, 2017 decreased to 24.2% from 26.0% for the quarterly period ended June 24, 2016, primarily due to the reversal of previously accrued amounts related to foreign matters.

The effective income tax rate for the first half period ended June 30, 2017 decreased to 23.3% from 24.1% for the first half period ended June 24, 2016, primarily due to: (1) the benefit from the release of a valuation allowance for capital losses, (2) an increase in the U.S. federal research and experimentation tax credit and (3) tax benefits related to domestic production activities deduction. These decreases were partially offset by a lower tax benefit related to share-based compensation awards in the first half period ended June 30, 2017 compared to the first half period ended June 24, 2016.

At June 30, 2017, the Company anticipates that unrecognized tax benefits will decrease by approximately $9 million over the next 12 months due to the potential resolution of unrecognized tax benefits involving several jurisdictions and tax periods. The actual amount of the decrease over the next 12 months could vary significantly depending on the ultimate timing and nature of any settlements.

Current and non-current income taxes payable include accrued potential interest of $12 million ($7 million after income taxes) at June 30, 2017 and $11 million ($7 million after income taxes) at December 31, 2016, and potential penalties of $8 million at each of June 30, 2017 and December 31, 2016.