XML 52 R13.htm IDEA: XBRL DOCUMENT v2.4.0.6
Income taxes
3 Months Ended
Sep. 29, 2012
Income Tax Disclosure [Abstract]  
Income taxes
Income taxes
The Company’s effective tax rate on its income before income taxes was 7.9% in the first quarter of fiscal 2013 as compared with 29.0% in the first quarter of fiscal 2012. During the first quarter of fiscal 2013, the Company's effective tax rate was favorably impacted primarily by the settlement of an audit by the U.S. Internal Revenue Service ("IRS") and a non-taxable gain on a bargain purchase (see Note 2), partially offset by increases to valuation allowances and reserves. Due to the reduced level of income in the first quarter of fiscal 2013, the net favorable impact of these items on the effective tax rate was significant. The first quarter effective tax rate was also impacted, to a lesser extent, by the mix of income earned in the lower tax rate jurisdictions.
In April 2012, the Company received an IRS Revenue Agent's Report related to the tax audit of an acquired company which requires Joint Committee review and approval. If approved, the Company will recognize additional net operating losses as determined under the settlement as well as the release of related reserves. As a result, it is reasonably possible that within the next twelve months the Company may record a tax benefit in the range of $15,000,000 to $17,000,000, which would favorably impact the effective tax rate in the period in which the matter is effectively settled.