Income Taxes

3 Months Ended

Apr. 01, 2022

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

Our effective income tax rate for the first quarter of 2022 was 20.4%, as compared to 16.6% in the corresponding period in 2021. The increase was primarily due to a one-time tax benefit from foreign income tax refunds in 2021.

We and our subsidiaries are subject to U.S. federal, state, and foreign income taxes. Currently, we are in different stages of multiple year examinations by various state and foreign taxing authorities. While we believe our reserves are more likely than not to be adequate to cover final resolution of all open tax matters, it is reasonably possible that future obligations related to these matters could arise.

Unrecognized tax benefits of $49.9 million and $42.3 million at the end of the first quarter of 2022 and at the end of 2021, if recognized, would favorably affect the effective income tax rate in future periods. At the end of the first quarter of 2022 and at

the end of 2021, we accrued interest and penalties of $10.5 million and $9.2 million. Although timing of the resolution and/or closure of audits is not certain, we do not believe that our gross unrecognized tax benefits would materially change in the next twelve months.

Income tax payable at the end of the first quarter of 2022 and at the end of 2021 was $63.4 million and $47.1 million, and is included in Other current liabilities in our Condensed Consolidated Balance Sheet.