Income Taxes

9 Months Ended

Sep. 01, 2012

Income Taxes Abstract

Income Taxes Disclosure

Note 12: Income Taxes

As of September 1, 2012, we had a $5,204 liability recorded under FASB ASC 740, “Income Taxes” for gross unrecognized tax benefits (excluding interest). As of September 1, 2012, we had accrued $886 of gross interest relating to unrecognized tax benefits. During the third quarter of 2012 our recorded liability for gross unrecognized tax benefits decreased by $138 excluding discontinued operations.

During the quarter, the statute of limitations for U.S. federal tax expired for the fiscal year ending November 29, 2008.

During the third quarter we released the valuation allowance in the amount of $7,390 associated with foreign tax credits generatedin connection withspecific corporate structure changesrequired to affect the sale of the Central America Paints business. During the third quarter, we determined that it is more likely than not that we will realize the benefit of these credits. We identified prudent and feasible tax planning strategies that will permit recognition of the tax benefit in future periods as we finalized our business structure and integration of the acquired business. The release of the valuation allowance resulted in a discrete tax benefit.

During the third quarter of 2012 we recorded a valuation allowance for $4,200 for the Brazil deferred tax assets as we determined that it is more likely than not that we will not realize the benefit of these deferred tax assets. We will continue to assess the profitability of our Brazilian legal entity as well as tax planning strategies to the extent feasible that may permit the recognition of the tax benefit in a future period.