Income Taxes (Tables)

12 Months Ended

Jan. 02, 2016

Earnings before taxes is summarized as follows:



	2015		2014		2013
	(dollars in thousands)
Domestic	$	266,831	$	240,936	$	195,435
Foreign	14,336		39,854		30,346
Total	$	281,167	$	280,790	$	225,781

Schedule of Provision of Taxes

The provision for income taxes is summarized as follows:



	2015		2014		2013
	(dollars in thousands)
Federal	$	78,617	$	69,536	$	60,232
State and local	9,515		9,316		3,248
Foreign	1,425		8,626		8,373
Total	$	89,557	$	87,478	$	71,853

Current	$	87,638	$	72,137	$	74,828
Deferred	1,919		15,341		(2,975		)
Total	$	89,557	$	87,478	$	71,853

Schedule of Effective Income Tax Reconciliation

Reconciliation of the differences between income taxes computed at the federal statutory rate to the effective rate are as follows:



	2015		2014		2013
U.S. federal statutory tax rate	35.0	%	35.0	%	35.0	%

State taxes, net of federal benefit	2.1		2.2		0.9
U.S. domestic manufacturers deduction	(2.6	)	(2.3	)	(2.6	)
Permanent book vs. tax differences	(1.1	)	(2.0	)	(1.2	)
Foreign tax rate differentials	(2.1	)	(1.9	)	(1.0	)
Reserve adjustments and other	0.6		0.2		0.7
Consolidated effective tax	31.9	%	31.2	%	31.8	%

Schedule of Deferred Assets and Liabilities

At January 2, 2016 and January 3, 2015, the company had recorded the following deferred tax assets and liabilities:



	2015			2014
	(dollars in thousands)
Deferred tax assets:
Federal net operating loss carryforwards	$	13,416		$	7,020
Compensation related	19,160			17,092
Accrued retirement benefits	43,930			8,211
Inventory reserves	8,183			6,503
Product liability and workers compensation reserves	5,811			7,810
Warranty reserves	9,252			9,191
Receivable related reserves	3,069			3,277
UNICAP	3,520			3,727
State net operating loss carryforwards	1,483			2,731
Foreign net operating loss carryforwards	17,549			—
Interest rate swap	—			157
Other	32,347			18,154
Gross deferred tax assets	157,720			83,873
Valuation allowance	(20,395		)	—
Deferred tax assets	$	137,325		$	83,873

Deferred tax liabilities:
Intangible assets	$	(182,471	)	$	(111,501	)
Foreign tax earnings repatriation	(1,363		)	(3,029		)
LIFO reserves	(93		)	(90		)
Depreciation	(551		)	(1,366		)
Interest rate swap	(6		)	—
Other	(2,690		)	(2,745		)

Deferred tax liabilities	$	(187,174	)	$	(118,731	)

Net deferred tax assets (liabilities)	$	(49,849	)	$	(34,858	)

Current deferred asset	$	51,723		$	51,017
Long-term deferred asset	11,438			2,925
Long-term deferred liability	(113,010		)	(88,800		)
Net deferred tax assets (liabilities)	$	(49,849	)	$	(34,858	)

Schedule of Unrecognized Tax Benefits

The following table summarizes the activity related to the unrecognized tax benefits for the fiscal years ended December 28, 2013, January 3, 2015 and January 2, 2016 (dollars in thousands):



Balance at December 28, 2013	$	12,727

Increases to current year tax positions	3,270
Increase to prior year tax positions	1,105
Decrease to prior year tax positions	(189		)
Settlements	(4,092		)
Lapse of statute of limitations	(347		)

Balance at January 3, 2015	$	12,474

Increases to current year tax positions	3,089
Increase to prior year tax positions	116
Decrease to prior year tax positions	(755		)
Settlements	—
Lapse of statute of limitations	(505		)

Balance at January 2, 2016	$	14,419

Summary of Income Tax Examinations

A summary of the tax years that remain subject to examination in the company’s major tax jurisdictions are:



United States – federal	2012 – 2015
United States – states	2006 – 2015
Australia	2011 – 2015
Brazil	2011 – 2015
Canada	2009 – 2015
China	2006 – 2015
Czech Republic	2013 – 2015
Denmark	2012 – 2015
France	2011 – 2015
Germany	2013 – 2015
India	2013 – 2015
Ireland	2009 – 2015
Italy	2011 – 2015
Luxembourg	2011 – 2015
Mexico	2010 – 2015
Netherlands	2004 – 2015
Philippines	2012 – 2015
Romania	2006 – 2015
South Korea	2010 – 2015
Spain	2011 – 2015
Sweden	2009 – 2015
Switzerland	2008 – 2015
Taiwan	2010 – 2015
United Kingdom	2003 – 2015