XML 51 R14.htm IDEA: XBRL DOCUMENT v2.4.0.6
Income Taxes
3 Months Ended
Dec. 29, 2012
Income Tax Expense (Benefit) [Abstract]  
Income Taxes
INCOME TAXES
Income tax expense for the three months ended December 29, 2012 and December 31, 2011 was $1.1 million and $1.8 million, respectively. The effective tax rates for the three months ended December 29, 2012 and December 31, 2011 were 6 percent and 9 percent, respectively. The decrease in the effective tax rate for the current year period compared to the prior year period was primarily due to an increase in income in the APAC segment, which benefits from reduced taxes due to tax holidays. As demonstrated in recent quarters, the tax rate can vary during the year based on the mix of forecasted earnings by tax jurisdiction.
As of December 29, 2012, there was no material change in the amount of unrecognized tax benefits recorded for uncertain tax positions as compared to the fiscal 2012 year end. The Company recognizes accrued interest and penalties related to uncertain tax positions in income tax expense. The amount of interest and penalties recorded for both the three months ended December 29, 2012 and December 31, 2011 was not material.
It is reasonably possible that a number of uncertain tax positions related to federal and state tax positions may be settled within the next 12 months. The Company is currently under examination by taxing authorities in the U.S. and is not undergoing any tax examinations in any of its major foreign jurisdictions. The U.S. examination may be resolved within the next twelve months. At this time it is not possible to estimate the amount of impact of any changes to previously recorded uncertain tax positions.
The Company maintains valuation allowances when it is more likely than not that all or a portion of a deferred tax asset will not be realized. During the three months ended December 29, 2012, the Company continued to record a full valuation allowance against its net deferred tax assets in the U.S., Germany and Romania and at a certain entity in the United Kingdom, as it is more likely than not that these assets will not be fully realized based primarily on historical performance. The Company will continue to provide a valuation allowance against its net deferred tax assets in each of the applicable jurisdictions going forward until the need for a valuation allowance is eliminated. The need for a valuation allowance will be eliminated when the Company determines it is more likely than not that the deferred tax assets will be realized.