Income Taxes (Tables)

12 Months Ended

Dec. 30, 2018

Earnings (Loss) From Continuing Operations Before Taxes Per Jurisdiction

Earnings (loss) before taxes and equity in net earnings (loss) of affiliate for the years 2018, 2017 and 2016 were taxed under the following jurisdictions:



	2018			2017		2016
	(In millions of dollars)
Domestic	$	53.1		$	55.2	$	112.4
Foreign	(62.5		)	26.5		37.3
Total	$	(9.4	)	$	81.7	$	149.7

Provision for Income Taxes From Continuing Operations

The provision for income taxes was as follows:



	2018			2017			2016
	(In millions of dollars)
Current tax expense:
U.S. federal	$	6.1		$	6.6		$	10.2
U.S. state and local	3.1			2.4			2.4
Foreign	11.2			9.7			10.0
Total current	20.4			18.7			22.6
Deferred tax (benefit) expense:
U.S. federal	(15.6		)	0.4			11.8
U.S. state and local	1.0			0.1			2.0
Foreign	(32.9		)	(6.4		)	(6.4		)
Total deferred	(47.5		)	(5.9		)	7.4
Total provision	$	(27.1	)	$	12.8		$	30.0

Deferred Taxes

Deferred taxes are comprised of the following:



	2018			2017
	(In millions of dollars)
Depreciation and amortization	$	(15.6	)	$	(13.4	)
Employee compensation and benefit plans	52.0			57.3
Workers’ compensation	15.0			14.5
Unrealized gain on securities	(30.9		)	(60.1		)
Investment in equity affiliate	(15.8		)	(15.5		)
Loss carryforwards	30.8			38.8
Credit carryforwards	155.6			132.7
Other, net	3.9			3.1
Valuation allowance	(27.8		)	(34.6		)
Net deferred tax assets	$	167.2		$	122.8

The deferred tax balance is classified in the consolidated balance sheet as:



	2018			2017
	(In millions of dollars)
Deferred tax asset	$	198.7		$	183.4
Other long-term liabilities	(31.5		)	(60.6		)
	$	167.2		$	122.8

Differences Between Income Taxes From Continuing Operations and U.S. Statutory Rate

The differences between income taxes from continuing operations for financial reporting purposes and the U.S. statutory rate of 21% in 2018 and 35% in 2017 and 2016 are as follows:



	2018			2017			2016
	(In millions of dollars)
Income tax based on statutory rate	$	(2.0	)	$	28.6		$	52.4
State income taxes, net of federal benefit	3.2			1.6			2.9
Foreign tax rate differential	(8.3		)	(1.5		)	(4.5		)
General business credits	(22.6		)	(18.1		)	(17.0		)
Life insurance cash surrender value	2.1			(7.4		)	(3.0		)
Foreign items	1.9			(1.3		)	4.9
GILTI, net of foreign tax credit	0.5			—			—
Foreign-derived intangible income	(0.9		)	—			—
Foreign business taxes	4.2			4.0			3.6
Non-deductible expenses	2.6			1.3			1.6
Tax law change	(0.5		)	13.9			—
PersolKelly Asia Pacific transaction gain	—			—			(4.8		)
Change in deferred tax realizability	(4.3		)	(7.8		)	(5.9		)
Stock compensation	(3.0		)	(0.7		)	—
Other, net	—			0.2			(0.2		)
Total	$	(27.1	)	$	12.8		$	30.0

Net Tax Effect of State and Foreign Loss Carryforwards

The net tax effect of state and foreign loss carryforwards at year-end 2018 totaled $30.8 million, which expire as follows (in millions of dollars):



Year	Amount
2019-2020	$	0.7
2021-2035	0.6
No expiration	29.5
Total	$	30.8

Reconciliation of Unrecognized Tax Benefits

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:



	2018			2017			2016
	(In millions of dollars)
Balance at beginning of the year	$	1.2		$	1.4		$	1.7

Additions for prior years’ tax positions	—			—			0.1
Reductions for prior years’ tax positions	—			—			—
Additions for settlements	—			—			—
Reductions for settlements	—			—			—
Reductions for expiration of statutes	(0.1		)	(0.2		)	(0.4		)

Balance at end of the year	$	1.1		$	1.2		$	1.4