Income Taxes

4 Months Ended

Apr. 20, 2013

Income Taxes

14. INCOME TAXES

The company’s effective tax rate for the first quarter of fiscal 2013 was 22.8%, significantly lower than the rate of 35.9% for the first quarter of 2012. The decrease in the current quarter’s rate was driven by the gain on acquisition, which was recorded net of deferred taxes as a component of income before income taxes. The gain was treated as a permanent item in the tax provision, and favorably impacted the rate by approximately 12%. The other primary differences in the effective rate and the statutory rate are state income taxes and the Section 199 qualifying production activities deduction. Tax legislation adopted in January of 2013 had an immaterial impact on the rate.

During the first quarter of fiscal 2013, the company’s activity with respect to its FIN 48 reserve and related interest expense accrual was immaterial. At this time, we do not anticipate significant changes to the amount of gross unrecognized tax benefits over the next twelve months.