XML 64 R27.htm IDEA: XBRL DOCUMENT v3.24.0.1
INCOME TAXES
 12 Months Ended
Dec. 30, 2023
Income Tax Disclosure [Abstract]  
INCOME TAXES INCOME TAXES
The following table presents income before income taxes used to calculate the provision for income taxes:
Year Ended December
(In thousands)202320222021
Domestic$128,026 $153,936 $118,142 
Foreign143,873 165,200 126,458 
Income before income taxes$271,899 $319,136 $244,600 
The following table presents components of the provision for income taxes:
Year Ended December
(In thousands)202320222021
Current:
Federal$26,290 $53,990 $24,514 
Foreign16,950 12,397 15,877 
State1,415 7,129 5,149 
Total current income taxes44,655 73,516 45,540 
Deferred:
Federal and state6,848 (9,828)2,951 
Foreign(10,598)9,955 686 
Total deferred income taxes(3,750)127 3,637 
Total provision for income taxes$40,905 $73,643 $49,177 
The following table presents a reconciliation of the differences between income taxes computed by applying the statutory federal income tax rate and "income taxes" recorded in the Company's statements of operations:
Year Ended December
(In thousands)202320222021
Tax at federal statutory rate$57,099 $67,019 $51,366 
State income tax, net of federal tax benefit2,614 4,542 5,167 
Foreign rate differences(20,354)(9,849)(13,698)
Employee compensation1,216 2,121 940 
Change in valuation allowance(5,089)4,881 2,010 
Global intangible low-tax income ("GILTI")5,518 3,586 2,852 
Other(99)1,343 540 
Income taxes$40,905 $73,643 $49,177 
Foreign rate differences include tax benefits of $5.4 million, $10.3 million and $5.5 million in 2023, 2022 and 2021, respectively, from statutorily exempt foreign income. As of December 2023, the Company does not have any active tax holidays from income taxes.
During the year ended December 2023, the Company was granted local income tax credits in a foreign jurisdiction totaling $65.5 million that will expire in 2031. A full valuation allowance was recorded against these tax credits in the Company's financial statements and has been presented net in the table above.
The following table presents the components of "deferred income tax assets" and "deferred income tax liabilities" recorded in the Company's balance sheets:
(In thousands)December 2023December 2022
Deferred income tax assets:
Inventories$11,592 $15,448 
Deferred compensation10,290 10,454 
Other employee benefits7,989 6,903 
Stock-based compensation4,139 5,286 
Other accrued expenses16,741 12,887 
Intangible assets29,232 31,589 
Leases12,055 11,161 
Operating loss carryforwards30,871 25,817 
Tax credit carryforwards69,221 2,645 
Gross deferred income tax assets192,130 122,190 
Less: valuation allowance(86,213)(25,799)
Net deferred income tax assets105,917 96,391 
Deferred income tax liabilities:
Leases11,595 10,373 
Depreciation20,929 22,152 
Taxes on unremitted earnings3,923 3,503 
Deferred income tax liabilities36,447 36,028 
Total net deferred income tax assets$69,470 $60,363 
Amounts included in the balance sheets:
Deferred income tax assets$75,081 $67,282 
Deferred income tax liabilities(5,611)(6,919)
$69,470 $60,363 
At the end of 2023, the Company is asserting indefinite reinvestment on foreign earnings totaling $92.2 million. The Company has determined the unrecorded deferred tax liability associated with the $92.2 million basis difference is approximately $0.7 million, primarily related to withholding taxes.
The Company has $65.5 million of local income tax credit carryforwards that will expire in 2031, $22.8 million of potential tax benefits for foreign operating loss carryforwards, $19.6 million of which will expire between 2024 and 2033, and foreign tax credit carryforwards of $3.5 million that will expire between 2030 and 2033. In addition, there are $8.2 million of potential tax benefits for state operating loss and credit carryforwards, $6.7 million of which will expire between 2024 and 2043.
A valuation allowance has been provided where it is more likely than not that deferred tax assets related to operating loss and tax credit carryforwards will not be realized. Valuation allowances totaled $65.5 million for tax credit carryforwards, $11.9 million for foreign operating loss carryforwards, $6.1 million for state operating loss and credit carryforwards, and $2.7 million for other foreign deferred income tax assets.
During 2023, the Company recorded a $65.5 million increase in valuation allowances related to tax credits granted in the current year. In addition, the Company recorded a tax benefit of $6.8 million due to a decrease in valuation allowances related to foreign operating losses as a result of committed tax planning actions, partially offset with a $2.1 million increase in valuation allowances related to current year foreign operating losses and other deferred income tax assets, inclusive of foreign currency effects. The Company also recorded a tax benefit due to a $0.4 million decrease in valuation allowances related to state operating loss and credit carryforwards as well as other state deferred income tax assets.
The following table presents a reconciliation of the change in the accrual for unrecognized income tax benefits:
(In thousands)Unrecognized Income Tax BenefitsAccrued Interest and PenaltiesUnrecognized Income Tax Benefits
Including Interest
and Penalties
Balance, December 2020$11,893 $4,864 $16,757 
Additions for current year tax positions154 — 154 
Additions for prior year tax positions18 525 543 
Reductions for prior year tax positions(348)(340)(688)
Balance, December 202111,717 5,049 16,766 
Additions for current year tax positions169 — 169 
Additions for prior year tax positions853 857 1,710 
Reductions for prior year tax positions— (30)(30)
Reductions due to statute expirations(137)(58)(195)
Balance, December 202212,602 5,818 18,420 
Additions for current year tax positions248 — 248 
Additions for prior year tax positions79 931 1,010 
Reductions for prior year tax positions(345)(140)(485)
Reductions due to statute expirations(2,249)(296)(2,545)
Balance, December 2023$10,335 $6,313 $16,648 
(In thousands)December 2023December 2022
Amounts included in the balance sheets:
Unrecognized income tax benefits, including interest and penalties$16,648 $18,420 
Less: deferred tax benefits(3,035)(3,445)
Total unrecognized tax benefits$13,613 $14,975 
The unrecognized tax benefits of $13.6 million at the end of 2023, if recognized, would reduce the annual effective tax rate.
The Company files a consolidated U.S. federal income tax return, as well as separate and combined income tax returns in numerous state and international jurisdictions. In the U.S., the Company’s 2020 through 2022 tax years remain open and are subject to examination by the Internal Revenue Service. In addition, the Company is currently subject to examination by various state and international tax authorities. Management regularly assesses the potential outcomes of both ongoing and future examinations for the current and prior years and has concluded that the Company’s provision for income taxes is adequate. The outcome of any one
examination is not expected to have a material impact on the Company’s financial statements. Management also believes that it is reasonably possible that the amount of unrecognized tax benefits may decrease by $2.1 million within the next 12 months due to expiration of statutes of limitations, all of which would reduce income tax expense.