Income Taxes (Tables)

12 Months Ended

Dec. 31, 2016

Earnings before taxes is summarized as follows:



	2016		2015		2014
	(dollars in thousands)
Domestic	$	336,625	$	266,831	$	240,936
Foreign	84,680		14,336		39,854
Total	$	421,305	$	281,167	$	280,790

Schedule of Provision of Taxes

The provision for income taxes is summarized as follows:



	2016		2015		2014
	(dollars in thousands)
Federal	$	94,621	$	78,617	$	69,536
State and local	13,107		9,515		9,316
Foreign	29,361		1,425		8,626
Total	$	137,089	$	89,557	$	87,478

Current	$	115,726	$	87,638	$	72,137
Deferred	21,363		1,919		15,341
Total	$	137,089	$	89,557	$	87,478

Schedule of Effective Income Tax Reconciliation

Reconciliation of the differences between income taxes computed at the federal statutory rate to the effective rate are as follows:



	2016		2015		2014
U.S. federal statutory tax rate	35.0	%	35.0	%	35.0	%

State taxes, net of federal benefit	2.3		2.1		2.2
U.S. domestic manufacturers deduction	(2.4	)	(2.6	)	(2.3	)
Permanent book vs. tax differences	(1.6	)	(1.1	)	(2.0	)
Foreign tax rate differentials	(1.1	)	(2.1	)	(1.9	)
Reserve adjustments and other	0.3		0.6		0.2
Consolidated effective tax	32.5	%	31.9	%	31.2	%

Schedule of Deferred Assets and Liabilities

At December 31, 2016 and January 2, 2016, the company had recorded the following deferred tax assets and liabilities:



	2016			2015
	(dollars in thousands)
Deferred tax assets:
Federal net operating loss carryforwards	$	16,951		$	13,416
Compensation related	25,650			19,160
Accrued retirement benefits	60,986			43,930
Inventory reserves	9,275			8,183
Product liability and workers compensation reserves	4,550			5,811
Warranty reserves	10,141			9,252
Receivable related reserves	3,376			3,069
UNICAP	5,104			3,520
State net operating loss carryforwards	1,923			1,483
Foreign net operating loss carryforwards	16,717			17,549
Other	37,822			32,347
Gross deferred tax assets	192,495			157,720
Valuation allowance	(29,893		)	(20,395		)
Deferred tax assets	$	162,602		$	137,325

Deferred tax liabilities:
Intangible assets	$	(173,673	)	$	(182,471	)
Foreign tax earnings repatriation	(1,178		)	(1,363		)
Depreciation	(2,957		)	(551		)
Interest rate swap	(3,655		)	(6		)
Other	(7,200		)	(2,783		)

Deferred tax liabilities	$	(188,663	)	$	(187,174	)

Net deferred tax assets (liabilities)	$	(26,061	)	$	(49,849	)

Current deferred asset	$	—		$	51,723
Long-term deferred asset	51,699			11,438
Long-term deferred liability	(77,760		)	(113,010		)
Net deferred tax assets (liabilities)	$	(26,061	)	$	(49,849	)

Schedule of Unrecognized Tax Benefits

The following table summarizes the activity related to the unrecognized tax benefits for the fiscal years ended January 3, 2015, January 2, 2016 and December 31, 2016 (dollars in thousands):



Balance at January 3, 2015	$	12,474

Increases to current year tax positions	3,089
Increase to prior year tax positions	116
Decrease to prior year tax positions	(755		)
Settlements	—
Lapse of statute of limitations	(505		)

Balance at January 2, 2016	$	14,419

Increases to current year tax positions	6,367
Increase to prior year tax positions	601
Decrease to prior year tax positions	(233		)
Settlements	—
Lapse of statute of limitations	(865		)

Balance at December 31, 2016	$	20,289

Summary of Income Tax Examinations

A summary of the tax years that remain subject to examination in the company’s major tax jurisdictions are:



United States – federal	2012 – 2016
United States – states	2007 – 2016
Australia	2012 – 2016
Brazil	2012 – 2016
Canada	2007 – 2016
China	2007 – 2016
Czech Republic	2014 – 2016
Denmark	2013 – 2016
France	2014 – 2016
Germany	2014 – 2016
India	2013 – 2016
Ireland	2010 – 2016
Italy	2012 – 2016
Luxembourg	2012 – 2016
Mexico	2011 – 2016
Netherlands	2005 – 2016
Philippines	2013 – 2016
Poland	2011 – 2016
Romania	2007 – 2016
South Korea	2011
Spain	2012 – 2016
Sweden	2010 – 2016
Switzerland	2008 – 2016
Taiwan	2011 – 2012
United Kingdom	2015 – 2016