Income Taxes (Tables)

12 Months Ended

Dec. 29, 2012

Earnings before taxes is summarized as follows:



	2012		2011		2010
	(dollars in thousands)
Domestic	$	157,471	$	125,730	$	104,421
Foreign	16,969		14,719		9,815
Total	$	174,440	$	140,449	$	114,236

Schedule of Provision of Taxes

The provision for income taxes is summarized as follows:



	2012			2011		2010
	(dollars in thousands)
Federal	$	42,660		$	33,778	$	31,309
State and local	7,216			7,169		7,052
Foreign	3,867			4,028		3,008
Total	$	53,743		$	44,975	$	41,369

Current	$	53,826		$	39,554	$	39,949
Deferred	(83		)	5,421		1,420
Total	$	53,743		$	44,975	$	41,369

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:



	2012		2011		2010
U.S. federal statutory tax rate	35.0	%	35.0	%	35.0	%

State taxes, net of federal benefit	2.7		3.0		4.1
Tax relief for U.S. manufacturers	(2.4	)	(2.1	)	(1.9	)
Permanent book vs. tax differences	(1.6	)	(1.1	)	(1.3	)
U.S. taxes on foreign earnings and foreign tax rate differentials	(1.5	)	(1.5	)	(0.3	)
Reserve adjustments and other	(1.4	)	(1.3	)	0.6
Consolidated effective tax	30.8	%	32.0	%	36.2	%

Schedule of Deferred Assets and Liabilities

At December 29, 2012 and December 31, 2011, the company had recorded the following deferred tax assets and liabilities, which were comprised of the following:



	2012			2011
	(dollars in thousands)
Deferred tax assets:
Federal net operating loss carryforwards	$	13,406		$	20,430
Compensation related	20,038			18,654
Accrued retirement benefits	7,105			8,780
Inventory reserves	5,241			4,611
Product liability and workers compensation reserves	6,351			5,052
Warranty reserves	5,122			4,490
Receivable related reserves	2,192			2,350
UNICAP	2,425			2,138
State net operating loss carryforwards	509			580
Interest rate swap	964			1,114
Other	10,501			10,802
Gross deferred tax assets	73,854			79,001
Valuation allowance	(740		)	—
Deferred tax assets	$	73,114		$	79,001

Deferred tax liabilities:
Intangible assets	$	(68,568	)	$	(69,998	)
Foreign tax earnings repatriation	(2,005		)	(1,546		)
LIFO reserves	(72		)	(161		)
Depreciation	(1,794		)	(2,547		)
Other	(2,148		)	(3,504		)

Deferred tax liabilities	$	(74,587	)	$	(77,756	)

Net deferred tax assets (liabilities)	$	(1,473	)	$	1,245

Current deferred asset	$	43,365		$	39,090
Long-term deferred liability	(44,838		)	(37,845		)
Net deferred tax assets (liabilities)	$	(1,473	)	$	1,245

Schedule of Unrecognized Tax Benefits

The following table summarizes the activity related to the unrecognized tax benefits for the fiscal years ended January 1, 2011, December 31, 2011 and December 29, 2012 (dollars in thousands):



Balance at January 2, 2010	$	20,251

Increases to current year tax positions	3,524
Increase to prior year tax positions	1,700
Decrease to prior year tax positions	(7,689		)

Balance at January 1, 2011	$	17,786

Increases to current year tax positions	2,113
Increase to prior year tax positions	334
Decrease to prior year tax positions	(2,393		)
Settlements	(1,494		)
Lapse of statute of limitations	(755		)

Balance at December 31, 2011	$	15,591

Increases to current year tax positions	1,572
Increase to prior year tax positions	84
Decrease to prior year tax positions	(1,289		)
Settlements	(3,836		)

Balance at December 29, 2012	$	12,122

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	2008 – 2012
United States – states	2004 – 2012
Australia	2011 – 2012
Brazil	2010 – 2012
Canada	2009 – 2012
China	2003 – 2012
Denmark	2009 – 2012
France	2011 – 2012
Germany	2011 – 2012
Italy	2009 – 2012
Luxembourg	2011 – 2012
Mexico	2007 – 2012
Philippines	2008 – 2012
South Korea	2006 – 2012
Spain	2008 – 2012
Taiwan	2008 – 2012
United Kingdom	2008 – 2012

- Definition

Tabular disclosure of tax positions taken in the tax returns filed or to be filed for which it is more likely than not that the tax position will not be sustained upon examination by taxing authorities (i.e., uncertain tax positions) and other types of income tax contingencies, including: (1) the policy on classification of interest and penalties; (2) a tabular reconciliation of the total amounts of unrecognized tax benefits at the beginning and end of the period; the total amount(s) of: (3) unrecognized tax benefits that, if recognized, would affect the effective tax rate, and (4) interest and penalties recognized in each of the income statement and balance sheet; (5) for positions for which it is reasonably possible that the total amounts unrecognized will significantly change within 12 months of the reporting date the: (i) nature of the uncertainty, (ii) nature of the event that could occur that would cause the change, and (iii) an estimate of the range of the reasonably possible change or a statement that an estimate of the range cannot be made; and (6) a description of tax years that remain subject to examination by major tax jurisdictions.

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- Definition

Tabular disclosure of income tax examinations that an enterprise is currently subject to or that have been completed in the current period typically including a description of the examination, the jurisdiction conducting the examination, the tax year(s) under examination, the likelihood of an unfavorable settlement, the range of possible losses, the liability recorded, the increase or decrease in the liability from the prior period, and any penalties and interest that have been recorded.

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