XML 51 R13.htm IDEA: XBRL DOCUMENT v2.4.0.6
Income taxes
6 Months Ended
Dec. 29, 2012
Income Tax Disclosure [Abstract]  
Income taxes
Income taxes
The Company’s effective tax rate on its income before income taxes was 18.6% in the second quarter of fiscal 2013 as compared with 29.3% in the second quarter of fiscal 2012. During the second 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") for an acquired company and the recognition of a U.S. tax benefit on the closure of a foreign operation. In April 2012, the Company received an IRS Revenue Agent's Report (“RAR”) related to the U.S. tax audit of the tax periods 2004 to 2008 for an acquired company which indicated that the Company was entitled to a tax reduction adjustment. Due to the size of the adjustment, Joint Committee review and approval was required. In October 2012, the Company received notice of the Joint Committee approval. As a result, the Company recognized a tax benefit of $17,366,000 in the second quarter of fiscal 2013 that related primarily to the recording of the effect of additional net operating loss carryforwards and, to a lesser extent, the release of related reserves.
For the first six months of fiscal 2013 and 2012, the Company's effective tax rate was 14.4% and 29.2%, respectively. This decrease in the effective tax rate was due primarily to (i) the settlement of two audits by the IRS for the Company and an acquired company, as previously mentioned, and (ii) a non-taxable gain on a bargain purchase (see Note 2), partially offset by (iii) increases to valuation allowances and reserves. Due to the reduced level of income in the first six months of fiscal 2013, the net favorable impact of these items on the effective tax rate was significant. The effective tax rate for the first six months of fiscal 2013 was also impacted, to a lesser extent, by the mix of income earned in the lower tax rate jurisdictions.