Income Taxes (Tables)

12 Months Ended

Sep. 28, 2018

Income Tax Expense (Benefit) from Continuing Operations

Income tax expense (benefit) from continuing operations for fiscal 2018, 2017 and 2016 consisted of:

In Thousands	2018			2017			2016

Current
U.S. Federal	$	46,421		$	2,914		$	13,848
State		(120	)		146			(852	)
Foreign		43,868			38,179			30,409
		90,169			41,239			43,405

Deferred
U.S. Federal		4,750			2,744			(6,893	)
State		348			(157	)		2,060
Foreign		(11,440	)		(10,801	)		(16,715	)
		(6,342	)		(8,214	)		(21,548	)
Income tax expense	$	83,827		$	33,025		$	21,857

U.S. and Foreign Components of Earnings from Continuing Operations Before Income Taxes

U.S. and foreign components of earnings from continuing operations before income taxes for fiscal 2018, 2017 and 2016 were:

In Thousands	2018		2017		2016

U.S.	$	42,507	$	39,119	$	66,036
Foreign		111,069		114,275		69,989
Earnings from continuing operations before income taxes	$	153,576	$	153,394	$	136,025

Components of Deferred Tax Assets and Liabilities

Primary components of the Company’s deferred tax assets and liabilities at the end of the fiscal 2018 and 2017 resulted from temporary tax differences associated with the following:

In Thousands	2018			2017

Reserves and liabilities	$	35,258		$	52,632
Loss carryforwards		37,850			53,175
Tax credit carryforwards		35,308			39,078
Employee benefits		10,197			12,720
Retirement benefits		6,086			14,907
Non-qualified stock options		7,470			10,937
Hedging activities		2,614			-
Other		3,105			3,940
Total deferred tax assets		137,888			187,389
Less valuation allowance		(27,118	)		(45,601	)
Total deferred tax assets, net of valuation allowance		110,770			141,788

Depreciation and amortization		(18	)		(6,503	)
Intangibles and amortization		(85,072	)		(111,196	)
Deferred costs		(3,697	)		(5,668	)
Hedging activities		-			(2,450	)
Other		(6,874	)		(3,156	)
Total deferred tax liabilities		(95,661	)		(128,973	)
Net deferred tax assets (liabilities)	$	15,109		$	12,815

Reconciliation of U.S. Federal Statutory Income Tax Rate to Effective Income Tax Rate

A reconciliation of the U.S. federal statutory income tax rate to the effective income tax rate for fiscal 2018, 2017 and 2016 was as follows:

	2018			2017			2016

U.S. statutory income tax rate		24.6	%		35.0	%		35.0	%
Foreign taxes		-1.6	%		-1.5	%		-10.3	%
Difference in foreign tax rates		4.2	%		-4.2	%		-4.4	%
Mandatory repatriation tax		25.5	%		0.0	%		0.0	%
Revaluation of deferred tax assets		4.4	%		0.0	%		0.0	%
Unremitted earnings		2.3	%		0.0	%		0.0	%
Change in foreign tax rates and laws		0.3	%		-2.9	%		0.0	%
Research and development credits		-2.3	%		-3.5	%		-5.2	%
Domestic manufacturing deduction		-1.0	%		-0.3	%		-1.0	%
Net change in tax reserves		0.1	%		-0.3	%		-0.2	%
State income taxes		-0.1	%		0.5	%		0.2	%
Valuation allowance		-3.4	%		-0.3	%		0.8	%
Subpart F income		0.7	%		0.5	%		0.7	%
Other, net		0.9	%		-1.5	%		0.5	%
Effective income tax rate		54.6	%		21.5	%		16.1	%

Reconciliation of Amount of Unrecognized Tax Benefits

A reconciliation of the amount of unrecognized tax benefits for fiscal 2018, 2017 and 2016 is as follows:

In Thousands	2018			2017			2016

Unrecognized tax benefits as of the beginning of year	$	8,848		$	7,877		$	11,389
Unrecognized gross benefit change:
Gross increase due to prior-period adjustments		-			1,608			445
Gross decrease due to prior-period adjustments		(2,140	)		-			(475	)
Gross increase due to current-period adjustments		738			853			1,475
Gross decrease due to settlements with taxing authorities		(240	)		-			(2,068	)
Gross decrease due to a lapse of the statute of limitations		(1,122	)		(1,490	)		(2,889	)
Total change in unrecognized gross benefit		(2,764	)		971			(3,512	)
Unrecognized tax benefits as of the end of the fiscal year	$	6,084		$	8,848		$	7,877

Unrecognized tax benefits that, if recognized, would impact the effective tax rate	$	5,240		$	4,888		$	6,626

Statement of operations:
Total amount of interest income (expense) included in income tax expense	$	(289	)	$	33		$	(308	)

Recognized in the statement of financial position:
Total amount of accrued interest included in income taxes payable	$	326		$	616		$	583

Income Tax Examinations by Tax Authorities in its Major Tax Jurisdictions

The Company is no longer subject to income tax examinations by tax authorities in its major tax jurisdictions as follows:

		Years No Longer
Tax Jurisdiction		Subject to Audit

U.S. Federal		2014 and prior
Belgium		2015 and prior
Canada		2010 and prior
France		2013 and prior
United Kingdom		2015 and prior