Income Taxes

9 Months Ended

Sep. 25, 2011

Income Taxes [Abstract]

Income Taxes

13. Income Taxes

The Company's third quarter 2011 income tax rate was favorably impacted by discrete tax items totaling $29.7 million which primarily consisted of a favorable settlement of an Internal Revenue Service (IRS) audit for tax years 2005 through 2008 and a favorable change in Wisconsin income tax law associated with certain net operating losses, partially offset by increases in certain income tax reserves.

During the first quarter of 2010, the Patient Protection and Affordable Care Act was signed into law. As a result of this Act, reimbursements the Company receives under Medicare Part D coverage for providing retiree prescription drug benefits would no longer be tax free beginning in 2011. At the beginning of second quarter of 2010, the Health Care and Education Reconciliation Act of 2010 delayed the impact of this change to 2013. On April 14, 2010, the SEC staff announced that the Office of the Chief Accountant would not object to a view that the two Acts should be considered together for accounting purposes. The Company accounted for both Acts in the first quarter of 2010 and recorded income tax expense of $13.3 million associated with this change which affected the Company's first quarter 2010 income tax rate.

The Company's second quarter 2010 income tax expense was affected by the favorable conclusion of an IRS audit and, in connection with the audit settlement, an adjustment to income taxes payable.

The Company's third quarter 2010 income tax rate was favorably affected by a domestic manufacturing benefit.