XML 49 R17.htm IDEA: XBRL DOCUMENT v2.4.0.6
Income Taxes
6 Months Ended
Dec. 30, 2012
Income Tax Disclosure [Abstract]  
Income Taxes
Income Taxes

The variation between the Company's effective income tax rate and the U.S. statutory rate of 35 percent is due to a percentage of the Company's projected income for the full year being derived from international locations with lower tax rates than the U.S. and the impact of tax credits available in the current year.

U.S. GAAP requires a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is cumulatively more than 50 percent likely to be realized upon ultimate settlement.
As of June 24, 2012, the Company's liability for unrecognized tax benefits was $4.4 million. During the six months ended December 30, 2012, there were no changes to the amount of unrecognized tax benefits. As a result, the total liability for unrecognized tax benefits as of December 30, 2012 was $4.4 million. If any portion of this $4.4 million is recognized, the Company will then include that portion in the computation of its effective tax rate. Although the ultimate timing of the resolution and/or closure of audits is highly uncertain, the Company believes it is reasonably possible that approximately $2.2 million of gross unrecognized tax benefits will change in the next 12 months as a result of pending audit settlements or statute requirements.
The Company files U.S. federal, U.S. state, and foreign tax returns. For U.S. federal purposes, the Company is generally no longer subject to tax examinations for fiscal years ended June 28, 2009 and prior. For U.S. state tax returns, the Company is generally no longer subject to tax examinations for fiscal years prior to 2009. For foreign purposes, the Company is generally no longer subject to examination for tax periods 2002 and prior. Certain carryforward tax attributes generated in prior years remain subject to examination and adjustment. The Company is currently under inquiry by the Hong Kong Inland Revenue Department for the fiscal year ended June 29, 2008 through the fiscal year ended June 27, 2010. The Company is also currently under audit by the German Federal Central Tax Office for the fiscal year ended June 29, 2008 through the fiscal year ended June 27, 2010.

The American Taxpayer Relief Act of 2012 was enacted on January 2, 2013.  Included within this legislation was an extension of the research and development credit which had previously expired on December 31, 2011. This legislation retroactively reinstates and extends the credit from the previous expiration date through December 31, 2013.  As the legislation was not enacted until after the close of the second quarter of fiscal 2013, the income tax impact of the retroactive reinstatement and extension will not be recognized until the third quarter of fiscal 2013.  If the tax impact of the research and development credit was recognized in the second quarter of fiscal 2013, it would represent a $1.5 million tax benefit.