Income Taxes

9 Months Ended

Oct. 01, 2011

Income Taxes [Abstract]

Income Taxes

Note 4 – Income Taxes

Income tax benefit was $1.7 million on pretax income of $50.9 million for the nine months ended October 1, 2011, as compared to an income tax expense of $13.9 million on pretax income of $57.5 million for the nine months ended October 2, 2010. The third quarter's benefit includes favorable adjustments related to audit settlements and a tax rate change. During the second quarter of 2011, we completed a reorganization of our legal entity structure and refinanced intercompany debt. As a result of these activities and lower taxable income in the United States and Canada, our annual effective tax rate is expected to be lower than our statutory rates. Also during the quarter, we made significant progress in settling intercompany transfer pricing issues between Canada and the United States and expect, as a result, to receive income tax refunds approximating $7.0 million within the next 12 months.