Income Taxes (Notes)

3 Months Ended

Sep. 28, 2012

Income Tax Disclosure [Abstract]

Income Taxes

INCOME TAXES

The Company recorded a tax expense of $0.4 million for the three months ended September 28, 2012. The tax expense primarily consisted of the expected tax liability based on the Company’s projected foreign financial results for the year ending June 28, 2013, offset by a benefit of audit settlements and reversals of liabilities related to the sale of a subsidiary. The effective tax rate differed from the combined federal and net state statutory income tax rate for the three months ended September 28, 2012 primarily due to the tax rate differential of the Company's foreign operations, utilization of net operating losses, audit settlements and reversals of previously accrued taxes in foreign jurisdictions.

The Company recorded a tax benefit of $0.7 million for the three months ended September 30, 2011. The tax benefit primarily comprised of amounts related to the reversal of unrecognized tax benefits and related interest, which was offset by tax liability based on the company's foreign projected financial results for the year ending June 29, 2012. The effective tax rate differed from the combined federal and net state statutory income tax rate for the three months ended September 30, 2011 primarily due to the tax rate differential of the Company's foreign operations, release of unrecognized tax benefits due to lapse of statutes of limitations, domestic operating losses generated from which the Company does not benefit and benefit from utilization of net operating losses not previously recognized.

As of September 28, 2012, the Company has provided a partial valuation allowance against its net deferred tax assets. Management continues to evaluate the realizability of deferred tax assets and related valuation allowance. If management's assessment of the deferred tax assets or the corresponding valuation allowance were to change, the Company would record the related adjustment to income during the period in which management makes the determination.

The Company had approximately $9.7 million of gross unrecognized tax benefit as of September 28, 2012, of which $7.3 million will impact the effective tax rate when recognized. The Company recognizes interest expense and penalties related to the unrecognized tax benefits within income tax expense. As of September 28, 2012, the Company also had approximately $14.6 million of interest and penalties attributable to the gross unrecognized tax benefits.

The Company is currently under audit by the Canadian tax authorities and expects that the audit will be concluded in the next twelve months.  It is reasonably possible that over the next twelve-month period the Company may experience an increase or decrease in its unrecognized tax benefits.  However, it is not possible to estimate either the magnitude or the range of any increase or decrease at this time.