Income Taxes

6 Months Ended

Jun. 29, 2013

Income Taxes

Income Taxes

3. Income Taxes

The provision for income taxes is based on the current estimate of the annual effective tax rate and is adjusted as necessary for discrete events occurring in a particular period. The effective income tax rate was 9.9% and 37.4% for the thirteen weeks ended June 29, 2013 and June 30, 2012, respectively, and 2.1% and 37.8% for the twenty-six weeks ended June 29, 2013 and June 30, 2012, respectively.  The decrease for the thirteen and twenty-six weeks ended June 29, 2013 was primarily the result of the nondeductible goodwill impairment related to the direct reporting unit recorded in the second quarter 2013 as a discrete item. For the twenty-six weeks ended June 29, 2013, there was an additional decrease in the effective tax resulting from a discrete tax benefit in the 2012 Work Opportunity Tax Credit taken during the first quarter 2013.

	Thirteen Weeks Ended				Twenty-Six Weeks Ended
	June 29,		June 30,		June 29,		June 30,
	2013		2012		2013		2012
Amount computed using statutory rates	35.0	%	35.0	%	35.00	%	35.0	%
State and local income taxes, net of federal benefit	2.5		2.2		2.5		3.0
Impairment of goodwill	(27.4	)	0.0		(37.5	)	0.0
Other	(0.2	)	0.2		2.1		(0.2	)
(Benefit) provision for income effective tax rate	9.9	%	37.4	%	2.1	%	37.8	%

The Company recognizes income tax liabilities related to unrecognized tax benefits in accordance with FASB ASC 740, Income Taxes, guidance related to uncertain tax positions, and adjusts these liabilities when its judgment changes as the result of the evaluation of new information. The Company has no uncertain tax positions which would result in a related income tax liability as of June 29, 2013.