Income Taxes

6 Months Ended

Jul. 01, 2012

Income Taxes [Abstract]

Income Taxes

15. Income Taxes

The Company’s effective tax rate, as calculated by dividing income tax expense by income before income taxes, for YTD 2012 and YTD 2011 was 41.5% and 38.1%, respectively. The Company’s effective tax rate, as calculated by dividing income tax expense by the difference of income before income taxes minus net income attributable to noncontrolling interest, for YTD 2012 and YTD 2011 was 44.0% and 40.0%, respectively.

The following table provides a reconciliation of the income tax expense at the statutory federal rate to actual income tax expense.

	First Half
In Thousands	2012			2011
Statutory expense	$	10,161		$	10,479
State income taxes, net of federal effect		1,257			1,305
Valuation allowance adjustment		774			0
Noncontrolling interest – Piedmont		(788	)		(626	)
Manufacturing deduction benefit		(852	)		(867	)
Meals and entertainment		602			442
Adjustment for uncertain tax positions		358			363
Other, net		525			239
Income tax expense	$	12,037		$	11,335

As of July 1, 2012, the Company had $5.1 million of uncertain tax positions, including accrued interest, of which $2.6 million would affect the Company’s effective tax rate if recognized. As of January 1, 2012, the Company had $4.7 million of uncertain tax positions, including accrued interest, of which $2.3 million would affect the Company’s effective tax rate if recognized. As of July 3, 2011, the Company had $5.2 million of uncertain tax positions, including accrued interest, of which $2.8 million would affect the Company’s effective tax rate if recognized. While it is expected that the amount of uncertain tax positions may change in the next 12 months, the Company does not expect any change to have a significant impact on the consolidated financial statements.

The Company recognizes potential interest and penalties related to uncertain tax positions in income tax expense. As of July 1, 2012, January 1, 2012, and July 3, 2011, the Company had $.5 million, $.4 million and $.5 million, respectively, of accrued interest related to uncertain tax positions. Income tax expense included interest expense of approximately $.1 million in both YTD 2012 and YTD 2011.

Tax years from 2008 remain open to examination by the Internal Revenue Service, and various tax years from 1993 remain open to examination by certain state tax jurisdictions to which the Company is subject due to loss carryforwards.

The Company’s income tax assets and liabilities are subject to adjustment in future periods based on the Company’s ongoing evaluations of such assets and liabilities and new information that becomes available to the Company.