13. Income Taxes

9 Months Ended

Jul. 04, 2012

Notes to Financial Statements

13. Income Taxes

Note 13. Income Taxes

In determining the quarterly provision for income taxes, the Company uses an estimated annual effective tax rate which is based on expected annual income, statutory tax rates, and available tax planning opportunities in the various jurisdictions in which the Company operates. Unusual or infrequently occurring items are separately recognized in the quarter in which they occur.

Our effective income tax rate for the forty weeks ended July 4, 2012 was 25.1%, compared to the effective income tax rate of 27.1% in the same period in the prior year. The decrease in the tax rate is primarily attributable to dividends received from equity investments, which are taxed at lower rates than is the income derived from wholly owned businesses. Moreover, the reserves related to unrecognized tax benefits were released because of the expiration of statutes of limitations.

As of July 4, 2012 and September 28, 2011, we had approximately $865 and $1,750, respectively, of unrecognized tax benefits, which are included in other long-term liabilities in the consolidated balance sheet.