Income Taxes (Tables)

12 Months Ended

Dec. 28, 2013

Earnings before taxes is summarized as follows:



	2013		2012		2011
	(dollars in thousands)
Domestic	$	195,435	$	157,471	$	125,730
Foreign	30,346		16,969		14,719
Total	$	225,781	$	174,440	$	140,449

Schedule of Provision of Taxes

The provision for income taxes is summarized as follows:



	2013			2012			2011
	(dollars in thousands)
Federal	$	60,232		$	42,660		$	33,778
State and local	3,248			7,216			7,169
Foreign	8,373			3,867			4,028
Total	$	71,853		$	53,743		$	44,975

Current	$	74,828		$	53,826		$	39,554
Deferred	(2,975		)	(83		)	5,421
Total	$	71,853		$	53,743		$	44,975

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:



	2013		2012		2011
U.S. federal statutory tax rate	35.0	%	35.0	%	35.0	%

State taxes, net of federal benefit	0.9		2.7		3.0
Tax relief for U.S. manufacturers	(2.6	)	(2.4	)	(2.1	)
Permanent book vs. tax differences	(1.3	)	(1.6	)	(1.1	)
U.S. taxes on foreign earnings and foreign tax rate differentials	(0.9	)	(1.5	)	(1.5	)
Reserve adjustments and other	0.7		(1.4	)	(1.3	)
Consolidated effective tax	31.8	%	30.8	%	32.0	%

Schedule of Deferred Assets and Liabilities

At December 28, 2013 and December 29, 2012, the company had recorded the following deferred tax assets and liabilities:



	2013			2012
	(dollars in thousands)
Deferred tax assets:
Federal net operating loss carryforwards	$	6,382		$	13,406
Compensation related	25,321			20,038
Accrued retirement benefits	6,234			7,105
Inventory reserves	5,971			5,241
Product liability and workers compensation reserves	7,902			6,351
Warranty reserves	7,139			5,122
Receivable related reserves	2,222			2,192
UNICAP	5,123			2,425
State net operating loss carryforwards	785			509
Interest rate swap	419			964
Other	12,091			10,501
Gross deferred tax assets	79,589			73,854
Valuation allowance	(466		)	(740		)
Deferred tax assets	$	79,123		$	73,114

Deferred tax liabilities:
Intangible assets	$	(82,188	)	$	(68,568	)
Foreign tax earnings repatriation	(2,552		)	(2,005		)
LIFO reserves	(22		)	(72		)
Depreciation	(1,724		)	(1,794		)
Other	(2,092		)	(2,148		)

Deferred tax liabilities	$	(88,578	)	$	(74,587	)

Net deferred tax assets (liabilities)	$	(9,455	)	$	(1,473	)

Current deferred asset	$	50,337		$	43,365
Long-term deferred asset	1,641			—
Long-term deferred liability	(61,433		)	(44,838		)
Net deferred tax assets (liabilities)	$	(9,455	)	$	(1,473	)

Schedule of Unrecognized Tax Benefits

The following table summarizes the activity related to the unrecognized tax benefits for the fiscal years ended December 31, 2011, December 29, 2012 and December 28, 2013 (dollars in thousands):



Balance at January 1, 2011	$	17,786

Increases to current year tax positions	2,113
Increase to prior year tax positions	334
Decrease to prior year tax positions	(2,393		)
Settlements	(1,494		)
Lapse of statute of limitations	(755		)

Balance at December 31, 2011	$	15,591

Increases to current year tax positions	1,572
Increase to prior year tax positions	84
Decrease to prior year tax positions	(1,289		)
Settlements	(3,836		)

Balance at December 29, 2012	$	12,122

Increases to current year tax positions	1,718
Increase to prior year tax positions	2
Decrease to prior year tax positions	(532		)
Settlements	—
Lapse of statute of limitations	(583		)

Balance at December 28, 2013	$	12,727

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	2008 – 2013
United States – states	2004 – 2013
Australia	2011 – 2013
Brazil	2010 – 2013
Canada	2009 – 2013
China	2003 – 2013
Czech Republic	2013
Denmark	2009 – 2013
France	2011 – 2013
Germany	2011 – 2013
India	2013
Italy	2009 – 2013
Luxembourg	2011 – 2013
Mexico	2007 – 2013
Philippines	2009 – 2013
South Korea	2007 – 2011
Spain	2008 – 2013
Taiwan	2008 – 2012
United Kingdom	2009 – 2013

- Definition

Tabular disclosure of tax positions taken in the tax returns filed or to be filed for which it is more likely than not that the tax position will not be sustained upon examination by taxing authorities (i.e., uncertain tax positions) and other types of income tax contingencies, including: (1) the policy on classification of interest and penalties; (2) a tabular reconciliation of the total amounts of unrecognized tax benefits at the beginning and end of the period; the total amount(s) of: (3) unrecognized tax benefits that, if recognized, would affect the effective tax rate, and (4) interest and penalties recognized in each of the income statement and balance sheet; (5) for positions for which it is reasonably possible that the total amounts unrecognized will significantly change within 12 months of the reporting date the: (i) nature of the uncertainty, (ii) nature of the event that could occur that would cause the change, and (iii) an estimate of the range of the reasonably possible change or a statement that an estimate of the range cannot be made; and (6) a description of tax years that remain subject to examination by major tax jurisdictions.

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- Definition

Tabular disclosure of income tax examinations that an enterprise is currently subject to or that have been completed in the current period typically including a description of the examination, the jurisdiction conducting the examination, the tax year(s) under examination, the likelihood of an unfavorable settlement, the range of possible losses, the liability recorded, the increase or decrease in the liability from the prior period, and any penalties and interest that have been recorded.

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