INCOME TAXES

9 Months Ended

Sep. 30, 2022

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

The effective tax rate for the three months ended September 30, 2022 was 21.4% versus 20.5% for the three months ended October 2, 2021. The effective tax rate for the nine months ended September 30, 2022 and October 2, 2021 was 21.9% and 20.9%, respectively. The effective tax rate for the three and nine months ended September 30, 2022 was higher than the same period in the prior year primarily driven by the jurisdictional mix of earnings related to the impact of the Rexnord Transaction in fiscal 2021.

As of September 30, 2022 and January 1, 2022, the Company had approximately $8.9 million and $8.8 million of unrecognized tax benefits, all of which would impact the effective income tax rate if recognized. Potential interest and penalties related to unrecognized tax benefits are recorded in income tax expense. The Company had approximately $1.3 million and $1.3 million of accrued interest as of September 30, 2022 and January 1, 2022, respectively.

With few exceptions, the Company is no longer subject to US Federal and state/local income tax examinations by tax authorities for years prior to 2018, and the Company is no longer subject to non-US income tax examinations by tax authorities for years prior to 2017.