Income Taxes (Notes)

9 Months Ended

Mar. 29, 2013

Income Tax Disclosure [Abstract]

Income Taxes

INCOME TAXES

The Company recorded a tax benefit of $8.1 million and $11.6 million for the three and nine months ended March 29, 2013, respectively. The tax benefit primarily was comprised of the reversal of previously recorded unrecognized tax benefits in Canada and Israel, and a refund of provincial taxes in Canada, partially offset by tax liability computed based on the Company’s projected foreign financial results for the year ending June 28, 2013, state taxes, and tax and interest for unrecognized tax benefits. The reversal of the unrecognized tax benefits in Canada and the recording of a provincial refund due to the Company was the result of the conclusion of an income tax audit for fiscal years 1996 to 2004 by the Canada Revenue Agency. The Company also recorded a tax benefit for the abatement of interest granted by the Canada Revenue Agency. The effective tax rate differed from the combined federal and net state statutory income tax rate for the three and nine months ended March 29, 2013 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 expense of $0.5 million and a tax benefit of $0.1 million for the three and nine months ended March 30, 2012, respectively. The net tax benefit was primarily comprised of tax liability computed based on the Company's foreign projected financial results for the year ending June 29, 2012 offset by the reversals of unrecognized tax benefits including related interest. The effective tax rate differed from the combined federal and net state statutory income tax rate for the three and nine months ended March 30, 2012 primarily due to tax expense incurred by the Company's foreign subsidiaries with operating income, offset by the release of the unrecognized tax benefits due to lapse of statute of limitations, benefits from reversals of previously accrued taxes in foreign jurisdictions and benefit from utilization of net operating losses not previously recognized.

As of March 29, 2013, 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 $4.8 million of gross unrecognized tax benefit as of March 29, 2013, of which $2.6 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 March 29, 2013, the Company also had approximately $8.6 million of interest and penalties attributable to the gross unrecognized tax benefits.

The income tax audit of fiscal years 1996 to 2004 by the Canadian tax authorities was concluded during the quarter ended March 29, 2013. The Company recorded a tax benefit of approximately $8.4 million and $12.7 million for the three and nine months ended March 29, 2013, comprised primarily of the abatement of interest granted by the Canada Revenue Agency, the reversal of previously recorded unrecognized tax benefits, and a provincial refund due to the Company as a result of the conclusion of the audit. It is reasonably possible that over the next twelve month period, the Company may experience an increase or a decrease in other unrecognized tax benefits.