Income Taxes

9 Months Ended

Jun. 29, 2019

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

Income tax expense for the three and nine months ended June 29, 2019 was $4.9 million and $20.7 million, respectively, compared to $3.1 million and $133.0 million for the three and nine months ended June 30, 2018, respectively.

The effective tax rates for the three and nine months ended June 29, 2019, were 16.5% and 22.4%, respectively, compared to the effective tax rates of 10.3% and 181.4% for the three and nine months ended June 30, 2018, respectively. The effective tax rate for the three months ended June 29, 2019 increased from the effective tax rate for the three months ended June 30, 2018, primarily due to the impact of the Global Intangible Low-Tax Income provision of the U.S. Tax Cuts & Jobs Act (“Tax Reform”). The effective tax rate for the nine months ended June 29, 2019 decreased from the effective tax rate for the nine months ended June 30, 2018, primarily due to the impact of Tax Reform, which was enacted on December 22, 2017.

There were no material additions to the amount of unrecognized tax benefits recorded for uncertain tax positions for the three months ended June 29, 2019. For the nine months ended June 29, 2019, the Company recorded an income tax benefit of $1.7 million primarily related to unrecognized tax benefits as the U.S. Department of Treasury issued additional guidance for Tax Reform. The guidance related to the treatment of foreign taxes paid that impacted the tax on the deemed repatriation of historical undistributed foreign earnings. The Company recognizes accrued interest and penalties on uncertain tax positions as a component of income tax expense. The amount of interest and penalties recorded for the three and nine months ended June 29, 2019 was not material.

One or more uncertain tax positions may be settled within the next 12 months. Settlement of these matters is not expected to have a material effect on the Company's consolidated results of operations, financial position and cash flows. The Company is not currently under examination by taxing authorities in the U.S. or any foreign jurisdictions in which the Company operates.

The Company maintains valuation allowances when it is more likely than not that all or a portion of a net deferred tax asset will not be realized. During the three months ended June 29, 2019, the Company continued to record a full valuation allowance against its net deferred tax assets in certain jurisdictions within the EMEA segment and a partial valuation against its net deferred tax assets in certain jurisdictions within the AMER segment, as it was more likely than not that these assets would 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 it determines it is more likely than not that the deferred tax assets will be realized.