Income Taxes

9 Months Ended

Sep. 30, 2012

Income Taxes

Note 10: Income Taxes

The Company’s effective tax rate for the three-and nine-month periods ending September 30, 2012, was 31.2% and 33.5%, respectively, and its effective tax rate for the three and nine-month periods ending October 2, 2011 was 3.1% and 22.2%, respectively. The quarterly and year-to-date rates for both years varied from the U.S. statutory rate primarily due to the favorable effect of international operations that are subject to tax rates generally lower than the U.S. rate, the favorable effect of the manufacturer’s deduction, and contingencies recorded for uncertain tax positions. The quarterly and year-to-date rates for 2011 also varied from the U.S. statutory rate due to an $18,848 net benefit from deferred tax valuation allowance adjustments on foreign jurisdiction net operating losses. In addition, to a much lesser extent, the prior year’s rate reflected the positive impact of non-taxable life insurance proceeds and the net release of reserves for uncertain tax positions.

The Company and/or its subsidiaries file federal, state and local income tax returns in the United States and various foreign jurisdictions. The Company is no longer subject to U.S. federal income tax examination by tax authorities for years before 2009. With few exceptions, the Company is no longer subject to examination prior to 2007 with respect to U.S. state and local and non-U.S. income taxes.

There have been no significant changes in the Company’s liability for uncertain tax positions since December 31, 2011. The Company’s estimate for the potential outcome for any uncertain tax issue is highly judgmental. Management believes that any reasonably foreseeable outcomes related to these matters have been adequately provided for. However, future results may include favorable or unfavorable adjustments to estimated tax liabilities in the period the assessments are made or resolved or when statutes of limitation on potential assessments expire. Additionally, the jurisdictions in which earnings or deductions are realized may differ from current estimates. As a result, the Company’s effective tax rate may fluctuate significantly on a quarterly basis.