Note 6 Income Tax

9 Months Ended

Jul. 01, 2017

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

Income Tax

The Company estimates its annual effective income tax rate at the end of each quarterly period. The estimate takes into account the geographic mix of expected pre-tax income (loss), expected total annual pre-tax income (loss), enacted changes in tax laws, implementation of tax planning strategies and possible outcomes of audits and other uncertain tax positions. To the extent there are fluctuations in any of these variables during a period, the provision for income taxes may vary.

The provision for income taxes for the three months ended July 1, 2017 and July 2, 2016 was $25.8 million (41.5% of income before taxes) and $20.0 million (40.3% of income before taxes), respectively, and $60.8 million (35.0% of income before taxes) and $66.0 million (43.1% of income before taxes) for the nine months ended July 1, 2017 and July 2, 2016, respectively. The decrease in income tax expense in 2017 on a year-to-date basis, despite a 14% increase in profit before tax, was primarily attributable to a discrete tax benefit in the first quarter of 2017 resulting from the merger of two foreign entities, the surviving entity of which was, and continues to be, included in the Company’s U.S. federal consolidated tax group. This restructuring allowed the Company to recognize a U.S. deferred tax asset to reflect the federal deductibility of a foreign uncertain tax position that became recognizable upon the merger of the subsidiaries.