Note 11 - Income Taxes

9 Months Ended

Sep. 01, 2018

Notes to Financial Statements

Income Tax Disclosure [Text Block]

Note

11:

Income Taxes

On

December 22, 2017,

the President of the United States signed into law U.S. Tax Reform. U.S. Tax Reform includes a number of provisions, including the lowering of the U.S. corporate tax rate from

35

percent to

21

percent, effective

January 1, 2018,

which results in a blended federal tax rate for fiscal year

2018.

U.S. Tax Reform also includes international provisions, which generally establish a territorial-style system for taxing foreign-source income of domestic multinational corporations and imposes a

one

-time transition tax on deemed repatriated accumulated foreign earnings as of

December 31, 2017.

During the

nine

months ended

September 1, 2018,

we recorded a provisional income tax benefit of

$35.6

million related to U.S. Tax Reform. This provisional amount includes a

$76.4

million benefit for the remeasurement of deferred tax assets and liabilities due to the decreased tax rate net of income tax expense for the transition tax.  The

$40.8

million transition tax is based on certain foreign earnings and profits for which earnings had been previously indefinitely reinvested, as well as estimates of assets and liabilities at future dates. The provisional amounts are subject to adjustment during the measurement period of

one

year following the enactment of U.S. Tax Reform. Our estimates are subject to change as we review the data available and any additional guidance, and will be evaluated throughout the measurement period, as permitted by Staff Accounting Bulletin

No.

118,

Income Tax Accounting Implications of the Tax Cuts and Jobs Act

.

Excess tax benefits related to employee share-based compensation, which were recorded as a reduction to income tax expense within the Condensed Consolidated Statement of Income, were

$266

and

$1,095

during the

three

and

nine

months ended

September 1, 2018,

respectively.

As of 

September 1, 2018,

we had a liability of

$8,524

recorded under ASC

740,

Income Taxes

, for gross unrecognized tax benefits (excluding interest), compared to

$8,887

as of

December 2, 2017.

As of

September 1, 2018,

we had accrued

$795

of gross interest relating to unrecognized tax benefits. For the

nine

months ended

September 1, 2018,

our recorded liability for gross unrecognized tax benefits decreased by

$363.