Taxes on Income (Tables)

12 Months Ended

Jan. 03, 2015

Components of income (loss) before income tax expense

The components of income before income tax expense are as follows (in millions):



	2014		2013			2012
Domestic	$	159.5	$	258.3		$	370.7
Foreign	5.5		(6.7		)	(8.5		)
	$	165.0	$	251.6		$	362.2

Components of income tax expense

The components of income tax expense are as follows (in millions):



	2014			2013			2012
Current:
Federal	$	(33.9	)	$	301.7		$	146.9
State	4.2			11.8			5.1
Foreign	1.9			(2.4		)	(2.9		)
	(27.8		)	311.1			149.1
Deferred:
Federal	78.5			(273.9		)	(35.4		)
State	11.2			(2.7		)	(0.7		)
Foreign	(0.1		)	—			—
	89.6			(276.6		)	(36.1		)
	$	61.8		$	34.5		$	113.0

Reconciliation of the U.S. federal statutory income tax rate to the Company's income taxes

Reconciliation of the provision for income taxes at the U.S. federal statutory income tax rate to the Company’s income taxes is as follows (dollars in millions):



	2014			2013			2012
Statutory rate	35		%	35		%	35		%
Income tax expense using federal statutory rate	$	57.8		$	88.1		$	126.8
State taxes on income net of federal benefit	9.9			5.9			2.9
Charitable donations of inventory	(9.2		)	(9.6		)	(4.3		)
Federal tax credits	(4.0		)	(11.2		)	(2.2		)
Reversal of deferred tax liability on life insurance	—			(17.2		)	—
Equity earnings of foreign affiliate	3.6			(13.3		)	(8.4		)
Other	3.7			(8.2		)	(1.8		)
	$	61.8		$	34.5		$	113.0

Significant components of the Company's net deferred tax liability

Significant components of the Company’s net deferred tax asset at year end are as follows (in millions):



	2014			2013
Deferred tax assets:
Pension liability	$	391.4		$	279.8
Workers’ compensation and other claims	184.3			152.0
Employee benefits	165.1			155.7
Accrued claims and other liabilities	90.4			92.4
Reserves not currently deductible	77.3			63.8
Federal deduction of state taxes	3.5			51.2
State tax credit carryforwards	21.7			21.3
Operating loss carryforwards	—			8.8
Other assets	45.6			9.5
	$	979.3		$	834.5


	2014			2013
Deferred tax liabilities:
Property	$	(546.8	)	$	(430.0	)
Inventory	(311.7		)	(273.3		)
Investment in Blackhawk	—			(17.9		)
Investments in foreign operations	(10.9		)	(6.5		)
	(869.4		)	(727.7		)
Net deferred tax asset	$	109.9		$	106.8

Deferred tax assets and liabilities are reported in the balance sheet as follows (in millions):



	2014			2013
Current deferred tax assets ⁽¹⁾	$	—		$	51.8
Noncurrent deferred tax assets ⁽²⁾	139.3			55.0
Current deferred tax liability	(29.4		)	—
Noncurrent deferred tax liability	—			—
Net deferred tax asset	$	109.9		$	106.8

⁽¹⁾ Included in Prepaid Expenses and Other Current Assets.

⁽²⁾ Included in Other Assets.

Reconciliation of unrecognized tax benefits

A reconciliation of the beginning and ending amount of unrecognized tax benefits follows (in millions):



	2014			2013			2012
Balance at beginning of year	$	137.5		$	119.4		$	161.3
Additions based on tax positions related to the current year	12.8			75.6			2.7
Reduction for tax positions of current year	—			(4.9		)	—
Additions for tax positions of prior years	112.6			0.2			2.2
Reductions for tax positions of prior years	—			(47.1		)	(46.9		)
Foreign currency translation	—			(0.3		)	0.1
Expiration of statute of limitations	—			(1.3		)	—
Settlements	(0.2		)	(4.1		)	—
Balance at end of year	$	262.7		$	137.5		$	119.4

- 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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