INCOME TAXES (Tables)

12 Months Ended

Jan. 02, 2021

Income Tax Disclosure [Abstract]

Significant Components of Deferred Tax Assets and Liabilities

Significant components of the Company’s deferred tax assets and liabilities at the end of each fiscal year were as follows:

(Millions of Dollars)	2020		2019
Deferred tax liabilities:
Depreciation	$	148.9	$	144.9
Intangible assets	741.4		737.1
Liability on undistributed foreign earnings	29.7		159.3
Lease right-of-use asset	126.5		129.7
Other	128.3		89.5
Total deferred tax liabilities	$	1,174.8	$	1,260.5
Deferred tax assets:
Employee benefit plans	$	244.2	$	235.4
Basis differences in liabilities	89.7		82.0
Operating loss, capital loss and tax credit carryforwards	808.7		1,100.3
Lease liability	129.6		129.6
Intangible assets	301.3		5.3
Capitalized research and development costs	52.6		—
Other	217.4		149.2
Total deferred tax assets	$	1,843.5	$	1,701.8
Net Deferred Tax Asset before Valuation Allowance	$	668.7	$	441.3
Valuation Allowance	$	(1,058.9)	$	(1,065.0)
Net Deferred Tax Liability after Valuation Allowance	$	(390.2)	$	(623.7)

Classification of Deferred Taxes

The components of earnings before income taxes and equity interest consisted of the following: 

(Millions of Dollars)	2020		2019		2018
United States	$	181.2	$	214.5	$	444.1
Foreign	1,085.8		915.5		578.0
Earnings before income taxes and equity interest	$	1,267.0	$	1,130.0	$	1,022.1

Income Tax Expense (Benefit) Attributable to Continuing Operations

Income tax expense (benefit) consisted of the following:

(Millions of Dollars)	2020		2019		2018
Current:
Federal	$	62.7	$	(23.7)	$	25.4
Foreign	199.8		195.9		175.0
State	20.6		6.5		24.8
Total current	$	283.1	$	178.7	$	225.2
Deferred:
Federal	$	(29.4)	$	5.7	$	29.7
Foreign	(208.8)		(32.9)		132.7
State	(3.5)		9.3		28.7
Total deferred	(241.7)		(17.9)		191.1
Income taxes	$	41.4	$	160.8	$	416.3

Reconciliation of U.S. Federal Statutory Income Tax to Income Taxes on Continuing Operations

The reconciliation of the U.S. federal statutory income tax provision to Income taxes in the Consolidated Statements of Operations is as follows:

(Millions of Dollars)	2020		2019		2018
Tax at statutory rate	$	266.1	$	237.3	$	214.6
State income taxes, net of federal benefits	13.0		22.1		24.7
Foreign tax rate differential	(41.9)		(53.3)		(33.2)
Uncertain tax benefits	20.3		(53.1)		4.5
Change in valuation allowance	(26.8)		10.5		5.1
Change in deferred tax liabilities on undistributed foreign earnings	(118.8)		—		—
Stock-based compensation	(9.8)		(24.1)		(4.1)
U.S. Federal tax reform	—		—		199.6
Capital loss	(40.4)		—		—
U.S. federal tax on foreign earnings	(17.7)		4.1		2.7
Intra-entity asset transfer of intellectual property	(27.7)		—		—
Other	25.1		17.3		2.4
Income taxes	$	41.4	$	160.8	$	416.3

Activity Related to Unrecognized Tax Benefits

The following table summarizes the activity related to the unrecognized tax benefits:

(Millions of Dollars)	2020		2019		2018
Balance at beginning of year	$	406.3	$	406.3	$	387.8
Additions based on tax positions related to current year	29.1		48.6		28.3
Additions based on tax positions related to prior years	35.8		78.5		103.0
Reductions based on tax positions related to prior years	(19.3)		(91.1)		(91.5)
Settlements	(0.5)		(0.3)		(2.5)
Statute of limitations expirations	(7.9)		(35.7)		(18.8)
Balance at end of year	$	443.5	$	406.3	$	406.3