Income Taxes (Tables)

12 Months Ended

Dec. 31, 2022

Geographic Components of Earnings Before Income Taxes

The geographic components of earnings (loss) before income taxes are as follows:


	Fiscal Year
(In millions)	2022		2021		2020
United States	$	(94.6)	$	22.7	$	(218.6)
Foreign	(158.3)		57.6		34.5
Earnings (loss) before income taxes	$	(252.9)	$	80.3	$	(184.1)

Provisions for Income Taxes

The provisions for income tax expense (benefit) consist of the following:


	Fiscal Year
(In millions)	2022		2021		2020
Current expense:
Federal	$	22.7	$	14.6	$	0.7
State	4.0		2.5		0.6
Foreign	28.2		15.0		8.3
Deferred expense (benefit):
Federal	(52.9)		(17.1)		(51.6)
State	(4.9)		(1.8)		(4.4)
Foreign	(60.9)		0.1		0.9
Income tax expense (benefit)	$	(63.8)	$	13.3	$	(45.5)

Reconciliation of Income Tax Expense, Net of Federal Income Tax Rate

A reconciliation of the Company’s total income tax expense and the amount computed by applying the statutory federal income tax rate to earnings before income taxes is as follows:


	Fiscal Year
(In millions)	2022		2021		2020
Income taxes at U.S. statutory rate of 21%	$	(53.1)	$	16.9	$	(38.7)
State income taxes, net of federal income tax	(2.3)		(1.1)		(8.1)





Foreign earnings taxed at rates different from the U.S. statutory rate:
Hong Kong	(14.2)		(7.2)		(3.3)

Other	2.1		3.1		1.2
Adjustments for uncertain tax positions	(0.9)		(1.3)		(1.4)
Change in valuation allowance	2.1		2.2		4.7
Tax impact of impairment in foreign jurisdiction	3.0		—		—


Global Intangible Low Tax Income tax	3.8		3.2		2.5
Foreign Derived Intangible Income tax benefit	(8.2)		(3.7)		(1.6)
Non-deductible executive compensation	3.3		5.2		1.6
Permanent adjustments related to employee share based compensation	1.6		(3.7)		(4.6)
Deferred tax on future cash dividends	(0.2)		(0.9)		1.0
Income tax audit adjustments	—		2.5		—
Deferred adjustment for income tax audit	—		(1.2)		—
Other Permanent adjustments and non-deductible expenses	(1.4)		(0.3)		1.0
Other	0.6		(0.4)		0.2
Income tax expense (benefit)	$	(63.8)	$	13.3	$	(45.5)

Significant Components of Deferred Income Tax Assets and Liabilities

Significant components of the Company’s deferred income tax assets and liabilities are as follows:


(In millions)	December 31, 2022		January 1, 2022
Deferred income tax assets:
Accounts receivable and inventory valuation allowances	$	18.1	$	5.2
Deferred compensation accruals	4.3		7.2
Accrued pension expense	18.7		25.7
Stock-based compensation	9.1		8.2
Net operating loss and foreign tax credit carryforwards	19.9		18.5
Book over tax depreciation and amortization	0.5		0.4
Tenant lease expenses	4.3		4.0
Environmental reserve	28.3		33.7
Other	6.5		9.5
Total gross deferred income tax assets	109.7		112.4
Less valuation allowance	(26.7)		(24.6)
Net deferred income tax assets	83.0		87.8
Deferred income tax liabilities:
Intangible assets	(76.2)		(190.6)
Tax over book depreciation and amortization	(9.4)		(9.3)
Other	(8.2)		(5.0)
Total deferred income tax liabilities	(93.8)		(204.9)
Net deferred income tax liabilities	$	(10.8)	$	(117.1)

Unrecognized Tax Benefits

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


	Fiscal Year
(In millions)	2022		2021
Unrecognized tax benefits at beginning of the year	$	10.9	$	5.5

Increases related to current year tax positions	0.2		7.8
Decreases related to prior year positions	(1.1)		(0.9)
Decreases relating to settlements with taxing authorities	(0.5)		(1.4)
Decrease due to lapse of statute	(0.5)		(0.1)
Unrecognized tax benefits at end of the year	$	9.0	$	10.9