Income Taxes

6 Months Ended

Jun. 25, 2011

Income Taxes [Abstract]

Income Taxes

6. Income Taxes

The income tax provision included in the condensed consolidated statements of income for the three and six months ended June 25, 2011 and June 26, 2010, is based on the estimated annual effective tax rate for the entire year. These estimated effective tax rates are subject to adjustment in subsequent quarterly periods as our estimates of pretax income or loss for the year change. The effective tax rate for the three and six months ended June 25, 2011, was 15.1% and differs from the U.S. federal statutory rate primarily due to a reduction in our deferred tax asset valuation allowance, foreign income taxed at lower rates, state taxes and interest on unrecognized tax benefits. The effective tax rate for the three and six months ended June 26, 2010, was 26.1% and 29.0%, respectively, and differs from the U.S. federal statutory rate primarily due to our inability to benefit our domestic losses, foreign income taxed at lower rates, state taxes and interest on unrecognized tax benefits.

In the quarter ended June 27, 2009, we recorded an increase in our valuation allowance on domestic deferred tax assets, with a corresponding charge to our income tax provision, of approximately $19.6 million as we were unable to conclude that it was more likely than not that such assets would be realized. Our deferred tax asset valuation allowance at June 25, 2011 was approximately $21.7 million on gross deferred tax assets of approximately $27.5 million. The remaining $5.8 million of gross deferred tax assets for which a valuation allowance was not recorded are realizable through future reversals of existing taxable temporary differences or loss carryback.

There was no material change to our unrecognized tax benefits and interest accrued related to unrecognized tax benefits during the three and six months ended June 25, 2011.