INCOME TAXES

6 Months Ended

Jun. 26, 2021

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

The Company’s effective tax rates for the three months ended June 26, 2021 and June 27, 2020 were 29.5% and 19.4%, respectively. The Company’s effective tax rates for the six months ended June 26, 2021 and June 27, 2020 were 20.6% and 15.0%, respectively. For the first half of 2021, the increases in the effective tax rates from the prior year periods were primarily attributable to deferred tax impacts of tax law changes enacted in the three months ended June 26, 2021 and higher non-deductible transaction costs, partially offset by increased tax benefit from stock-based compensation deductions in the first half of 2021 compared to the corresponding period in 2020.

For the three months ended June 26, 2021, the Company’s unrecognized tax benefits increased by $1.6 million to $26.9 million, primarily due to uncertainties pertaining to acquisitions in the period, an additional quarter of Canadian Scientific Research and Experimental Development Credit reserves, partially offset by audit settlements. For the three months ended June 26, 2021, the unrecognized income tax benefits that would impact the effective tax rate increased by $2.1 million to $24.6 million, for the same reasons discussed above. The accrued interest on unrecognized tax benefits was $2.0 million at June 26, 2021. The Company estimates that it is reasonably possible that the unrecognized tax benefits will decrease by approximately $1.1 million over the next twelve-month period, primarily due to the lapse of statute of limitations.

The Company conducts business in a number of tax jurisdictions. As a result, it is subject to tax audits on a regular basis including, but not limited to, such major jurisdictions as the U.S., Canada, the U.K., France, Germany, and China. With few exceptions, the Company is no longer subject to U.S. and international income tax examinations for years before 2017.

The Company and certain of its subsidiaries have ongoing tax controversies in the U.S., Canada, France, Germany, and India. The Company does not anticipate resolution of these audits will have a material impact on its consolidated financial statements.