XML 56 R18.htm IDEA: XBRL DOCUMENT v2.4.1.9
Income Taxes
3 Months Ended
Dec. 27, 2014
Income Taxes  
Income Taxes

11.Income Taxes

 

The Company recognizes deferred tax assets and liabilities for the expected future tax benefits or consequences of temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases.  Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled.

 

As of December 27, 2014, the Company had a $17.7 million state capital loss carryforward and a state net operating loss carryforward of $11.5 million available to be utilized against future taxable income for years through fiscal 2015 and 2029, respectively, subject to annual limitation pertaining to change in ownership rules under the Internal Revenue Code of 1986, as amended.  Based upon earnings history, the Company concluded that it is more likely than not that the net operating loss carryforward will be utilized prior to its expiration, but that the capital loss carryforward will not.  The Company has recorded a valuation allowance against the entire deferred tax asset balance for the capital loss carryforward.

 

As of each of the periods ending December 27, 2014 and September 27, 2014, the total amount of unrecognized tax benefits was $14.8 million.  The amount of unrecognized tax benefits at December 27, 2014 that would impact the effective tax rate if resolved in favor of the Company is $14.8 million.  As a result of prior acquisitions, the Company is indemnified for $7.2 million of the total reserve balance, and the indemnification is capped at $47.4 million.  If these unrecognized tax benefits are resolved in favor of the Company, the associated indemnification receivable, recorded in other long-term assets, would be reduced accordingly.  The indemnifications have expiration dates through June 2016.

 

As of December 27, 2014 and September 27, 2014, accrued interest and penalties of $2.3 million and $2.4 million, respectively, were included in the Unaudited Consolidated Balance Sheets.  The Company recognizes interest and penalties in income tax expense.  The Company released $1.0 million of unrecognized tax benefits in the current quarter of fiscal 2015 and expects to release an additional $7.8 million over the next twelve months due to the expiration of the statute of limitations.

 

In the normal course of business, the Company is subject to tax examinations by taxing authorities both inside and outside of the United States.  The Company is generally not subject to examination with respect to returns filed for fiscal years prior to 2010.