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Income Taxes
9 Months Ended
Sep. 07, 2013
Income Tax Disclosure [Abstract]  
Income Taxes
INCOME TAXES
The Company’s effective tax rate for the 12 weeks ended September 7, 2013 and September 8, 2012 was 25.9% and 27.1%, respectively. For the 36 weeks ended September 7, 2013 and September 8, 2012, the Company’s effective tax rate was 24.2% and 17.7%, respectively. The lower effective tax rate for the 12 weeks ended September 7, 2013 versus the prior year reflects the benefit from the deductibility of the acquisition-related transaction and integration expenses occurring primarily in high statutory tax rate jurisdictions. The higher effective tax rate for the 36 weeks ended September 7, 2013 versus the prior year reflects the benefits in the prior year of a favorable court decision in a foreign tax jurisdiction supporting the Company’s long-term global tax planning strategies.
The Company maintains certain strategic management and operational activities in overseas subsidiaries, and its foreign earnings are taxed at rates that are generally lower than the U.S. federal statutory income tax rate. A significant amount of the Company’s earnings are generated by its Canadian, European and Asia Pacific subsidiaries and, to a lesser extent, in other foreign jurisdictions that are not subject to income tax and free trade zones where the Company owns manufacturing operations. The Company has not provided for U.S. taxes for earnings generated in foreign jurisdictions because it plans to reinvest these earnings indefinitely outside the U.S. However, if certain foreign earnings previously treated as permanently reinvested are repatriated, the additional U.S. tax liability could have a material adverse effect on the Company’s after-tax results of operations and financial position.
The Company is subject to periodic audits by domestic and foreign tax authorities. Currently, the Company is undergoing routine periodic audits in both domestic and foreign tax jurisdictions. It is reasonably possible that the amounts of unrecognized tax benefits could change in the next 12 months as a result of the audits; however, any payment of tax is not expected to be significant to the consolidated financial statements.
For the majority of tax jurisdictions, the Company is no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations by tax authorities for years before 2008.